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Dow Jones reports that Ramesh Chakrapani, an executive with the Blackstone Group, “has been arrested and charged with fraud in an insider trading scheme involving shares of Albertson's Inc. that allegedly netted more than $3.5 million in illicit profits, according to court documents made public Wednesday.”

Chakrapani also is being sued by the US Securities and Exchange Commission (SEC).

According to the story, “Prosecutors have alleged Chakrapani tipped a co-conspirator with material nonpublic information concerning the acquisition of Albertson's Inc. prior to the public announcement of the deal in January 2006.

“Chakrapani was privy to nonpublic information about the deal because he worked as a member of the team assigned to advise Albertson's on the transaction, the government said. Prosecutors said the co-conspirator then traded shares in his personal account and caused trades of Albertson's shares in his firm's proprietary trading accounts and an account held by the co-conspirator's parents.

“In its lawsuit, the SEC has alleged Chakrapani tipped a friend, who works as a financial analyst.”

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