She cried as she mentioned the pain her crimes had caused her family. Seated in the front bench among spectators were her mother, sister, and two nieces.
“I’m deeply ashamed of what I did,’’ Chiesi said.
In the wider probe spurred by the case, authorities are targeting those in the securities industry who pass along secrets gleaned from employees at public companies.
Chiesi admitted to passing along tips to at least three people, including hedge fund operator Raj Rajaratnam, who founded the Galleon Group hedge fund management firm. Rajaratnam has pleaded not guilty to federal charges and remains free on $100 million bail. He has said any trades he made were based on public information.
Rajaratnam and Chiesi were considered the main defendants in a case prosecutors announced in 2009. US Attorney Preet Bharara said that it was the largest hedge fund insider trading case ever brought, and that it was unique because prosecutors for the first time made extensive use of wiretaps to detect defendants sharing financial secrets about public companies.
Prosecutors have said the Rajaratnam case generated more than $50 million in illegal profits. That included $1.7 million at New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc., where Chiesi was employed.
As part of her plea deal, Chiesi agreed to forfeit any money she received from sharing inside information. But Chiesi said during her plea that she did not make any trades in personal accounts related to the information.
Her lawyer, Alan Robert Kaufman, said no formula to determine what she might have to forfeit had been determined, but he predicted it would be a very low number.
The three counts to which Chiesi pleaded guilty carry a potential sentence of up to 15 years in prison, but the plea agreement she signed with prosecutors calls for her to receive between 37 and 46 months in prison when she is sentenced on May 13.
Kaufman said he will ask Judge Richard J. Holwell to sentence her to less than three years in prison.
Last year, before he pleaded guilty and was sentenced to six months in prison, former IBM executive Robert Moffat said his romantic feelings for Chiesi clouded his judgment. His lawyers said that Moffat was motivated by a desire to impress Chiesi, with whom he had an affair, and that she “played’’ him by using their intimate relationship to get confidential information.
