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U.S. charges Blackstone executive of insider trading


    NEW YORK (Reuters) - U.S. prosecutors have filed criminal charges against the managing director at private equity firm Blackstone Group LP for an insider trading scheme involving shares of supermarket chain Albertsons Inc.

    The criminal complaint filed on Tuesday is based partly on a U.S. Securities and Exchange Commission civil case on the same day against Ramesh Chakrapani in U.S. District Court in Manhattan.

    Neither the civil complaint nor the criminal complaint identified him as a Blackstone employee, but the firm confirmed his identity and said it was "fully cooperating" with authorities.

    "We are shocked by this alleged breach of the law and violation of our own compliance policies and ethical standards," said Blackstone spokesman Peter Rose. "We are fully cooperating with the authorities in this investigation."

    The criminal complaint said that, from March 2005 to February 2006 in New York and elsewhere, Chakrapani and others "unlawfully, willfully, and knowingly did combine, conspire, and agree to commit securities fraud."

    The complaint was based partly on the civil lawsuit by the U.S. market regulator, which accused Chakrapani, 33, of helping people he tipped off to reap $3.6 million in illegal profits in 2006.

    It said he tipped "a friend and fellow industry professional with material nonpublic information regarding at least one impending corporate acquisition in advance of its public announcement."

    A group including Supervalu Inc , CVS Caremark Corp and private equity firm Cerberus bought Albertsons in 2006. The SEC said Chakrapani was part of the Blackstone team that advised Albertsons on the deal.

    The friend, a financial analyst in New York, traded on the information and tipped and traded on behalf of his parents, the complaint said. It did not identify who received the tips.

    Chakrapani, a citizen of the United States who lives in London, worked in his firm's New York office from 2001 to 2008 before transferring to the London office, the complaint said.

    It said Chakrapani passed the tips to his friend in January 2006, making at least 20 telephone calls and exchanging at least 18 text messages.

    The case is SEC v. Chakrapani, 09-00325, U.S. District Court, Southern District of New York (Manhattan).

    (Reporting by Grant McCool; Editing by Andre Grenon)