So what is the over/under on the number of people Danielle Chiesi will ultimately be alleged to have become "intimate" with in order to gain information for insider trading? We are already up to two and we're still on the first witness in the Rajaratnam trial. I'm conservatively setting the over/under at three.

As I wrote back in 2009 ("'Sexuality' and Insider Trading") as the Galleon news began to break, Chiesi--"a blond, blue-eyed former teenage beauty queen"--is said to have

used her sexuality to build sources at male-dominated tech companies. She reportedly wore short skirts, low-cut tops and outfits such as a "tight red suit with red fishnet stockings" as part of her effort to develop her network, Bloomberg says. According to the article, one of Chiesi's go-to "ploys" was to go barhopping with a group, and then peel a potential source off to talk to on the dance floor.

I noted at the time that this appeared to be the first time that "sexuality" had surfaced as a factor in the usually dry world of insider trading cases (with the exception of some "untrustworthy mistress" cases).

Since then, details have merged as to some of the sources that Ms. Chiesi allegedly cultivated. After pleading guilty to securities fraud and conspiracy last year, Robert Moffat, a former IBM executive, told the court that he had an “intimate relationship” with Chiesi. Moffatt claimed that Chiesi, to whom he had allegedly provided information, "was not the passive recipient of information from [him].... To the contrary, she manipulated or ‘played' him to obtain information she could use to New Castle's advantage.”

I really thought we were all finished hearing about this part of Chiesi's life until yesterday, when Anil Kumar, a star witness in the Rajaratnam trial, testified that Rajaratnam warned him that his value as a secret tipster for Galleon "was 'diminished' because trader Danielle Chiesi had an 'intimate relationship' with the head of Advanced Micro Devices Inc. This relationship allowed her to "provide more information than I was,” Kumar testified. [Note--A spokesman for the former AMD CEO denied Kumar's sworn testimony, saying that “[a]ny suggestion that the relationship was intimate is untrue.”]

The Rajaratnam trial is expected to last two months, so stay tuned to see if the use of "intimate relationships" in gathering information resurfaces yet again.

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