Former Hedge Fund Executive Charged by SEC

BOSTON (Reuters) - A former top executive at hedge fund firm ValueAct Capital is one of seven people charged with trading on inside information in Acxiom Corp.

Ronald Yee, who had been the San Francisco-based hedge fund firm's chief financial officer until June 2008, was named in a civil suit filed by the Securities and Exchange Commission on Friday.

The SEC did not identify Yee's former employer.

ValueAct, a nine-year-old firm that invests roughly $3.5 billion in undervalued securities, said it has been cooperating with the SEC since the agency began probing Yee in 2008.

The firm, which made national headlines when its co-founder Jeffrey Ubben became the chairman of Martha Stewart Living Omnimedia Inc, put Yee on administrative leave in April 2008. In June 2008 the partners accepted Yee's request to resign.

ValueAct said it requires all employees to participate in rigorous training on how to handle non-public information and immediately told investors about the probe into Yee in 2008 and then wrote to them on Friday to detail the charges against him.

The hedge fund is not implicated in the scheme in any way and received a no-action letter from the SEC, confirming that it is not a target in the investigation, said George Hamel, ValueAct's co-founder and chief operating officer.

Yee's lawyer said he is innocent and will contest the charges.

The matter has drawn attention because it comes only two weeks after prosecutors charged prominent hedge fund firm Galleon Group's founder Raj Rajaratnam with insider trading.

At that time sources familiar with regulators' insider trading probes said there would likely be more charges, but they did not give details about specific cases.

The cases are very different however. In the Galleon matter, the fund's founder has been charged while in the Yee matter the hedge fund and its current partners have not been implicated in the scheme.