Blackstone (BX) Managing Director Sued By SEC Over Insider Trading Scandal

Ramesh Chakrapani, a managing director of Blackstone Group's (NYSE: BX) mergers and acquisitions advisory unit, was sued by U.S. regulators for allegedly assisting friends make $3.6 million from insider
trading.

Chakrapani told a friend about a pending acquisition of Albertson's Inc. grocery store chain. Chakrapani was a member of the team advising Albertson's in 2006 on an acquisition by a consortium led by Cerberus Capital Management LP, according to the lawsuit.

The case show that Chakrapani's friend, a financial analyst, called him January 11th, two days after a private meeting at which Albertson's and the investor group revived acquisition talks. Over the next several days, the two spoke at least 20 times and exchanged 18 text messages. The friend used his personal brokerage account and his employer's accounts to purchase more than a million Albertson's shares.

Albertson's stock closed 5% higher on Jan. 23, 2006, when the acquisition was announced. According to the complaint, Chakrapani's friend and his parents made $3.6 million in profits on the suspected fradulent transactions.

Blackstone said it is cooperating with authorities and has suspended Ramesh Chakrapani.

Bloomberg reported this is the second case in a year targeting insider trading linked to a deal in which Blackstone was involved.

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