Ruiz out as Global Foundries chairman
Another casualty of Galleon-New Castle insider trading?
GlobalFoundries, the wafer baking spinout of Advanced Micro Devices, announced this morning that chairman Hector Ruiz has taken a voluntary leave of absence from the company, effective immediately.
Ruiz is rumored to be one of the executives who spoke out of turn about that spinout, with the information subsequently finding its way back to hedge fund operators Galleon Group and New Castle Group; this insider information was used to profit illegally in AMD share trading.
The statement from GlobalFoundries said that Ruiz had submitted his resignation from GlobalFoundries in September (a date was not supplied), with an effective date of January 4, 2010. The implication appears to be that Ruiz had already planned to step down before the insider trading scandal involving Galleon and New Castle that hit on October 16.
This scandal has implicated executives from IBM, Intel and McKinsey & Co in providing information that allowed Galleon and New Castle to gain at least $20m from illegal trades in various stocks. These included those of AMD, Akamai Technologies, Clearwire, PeopleSupport, IBM, and Sun Microsystems.
Lanny Ross, who is the former chief executive officer of chip maker Broadcom and who is a member of the GlobalFoundries board, has been tapped to be interim chairman until a permanent chairman is appointed by the board.
A spokesperson at GlobalFoundries said that Ruiz' stepping down was consistent with his stated plans as the wafer baker was being spun out. The spokesperson would not comment as to any relationship between the leave of absence that Ruiz is taking and the insider trading scandal.
Last Friday, Bob Moffat, a former high-level executive at IBM, who allegedly passed information about the GlobalFoundries spinoff as well as on upcoming quarterly results for IBM and Sun Microsystems to Danielle Chiesi at New Castle, left Big Blue. He was stripped of his titles and put on a leave of absence on October 20. Moffat used to be senior vice president and general manager of IBM's Systems and Technology Group, which makes and sells servers, storage, and chips.
Moffat was also one of the handful of executives who had risen to the top of IBM. He was a possible contender for one or more of the top jobs of president or chief executive officer, once current chairman Sam Palmisano begins the process of retiring, perhaps next year if history is any guide.
Chiesi was also sharing information with Galleon Group founder Raj Rajaratnam, and both are accused by the US District Attorneys office in Manhattan of profiting specifically on the GlobalFoundries spinout.
Ruiz has not been charged by the US District Attorneys office in connection with the Galleon and New Castle insider trading scams. But the buzz last week was that if Ruiz was the executive who talked, he could be charged just like Moffat has been.
Thus far, only anonymous sources have been quoted in Bloomberg as saying that Ruiz is the AMD executive in the original complaints filed on October 16 who provided information to Chiesi and therefore to Rajaratnam. ®