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Another Galleon Player Pleads Guilty

Mark Kurland pleaded guilty Wednesday to two counts of insider trading

Mark Kurland, the co-founder of New Castle Fund and Danielle Chiesi's boss - the aging beauty queen whose charms allegedly persuaded ex-IBM SVP Robert Moffat to tell her company secrets - pleaded guilty Wednesday to two counts of insider trading but has refused to rat Dani out and cooperate with the authorities. (Man, she must be good.)

Kurland's decision to waive indictment on conspiracy to commit securities fraud and move directly to a plea was taken to mean he was going to turn state's evidence and at least testify against Dani, having eavesdropped on a wiretapped conversation between her and Moffat about the restructuring of AMD. But no, he's going to play the gentleman.

The government's allegations say Kurland encouraged Dani to get inside information and then, like Galleon chief Raj Rajaratnam, traded on her tips. Apparently he's looking at something like three years in prison and disgorging $900,000. It's unclear how difficult Kurland's lack of cooperation will make it for the government to prove its case against Chiesi and Rajaratnam, both of whom have pleaded not guilty.

Moffat's lawyers, meanwhile, are trying to save him from indictment, but he's unwilling to cooperate with the government too.

Meanwhile, the federal judge who drew the SEC's civil suit against Rajaratnam said Monday that the agency could expand its charges against the hedge fund co-founder to include allegations that he paid ex-McKinsey & Co director Anil Kumar $1.75 million for inside information on companies such as AMD.

Kumar has already pleaded guilty to charges of securities fraud and conspiracy, confessing in the process to the payoffs.

The judge said next week he'll decide whether the SEC can use the government's 14,000 hours of wire taps in its case against Rajaratnam, Kumar, former IBM SVP Robert Moffat and Intel executive Rajiv Goel et al.

Rajaratnam claims the taps properly belong only in the government's criminal case.

The recording, made from 2004-2009, were given to Rajaratnam's lawyers as part of discovery and now they won't produce them for the SEC.

The SEC's case goes to trial August 2.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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