A high-profile US technology executive has been named as an alleged source of confidential company information in the $25 million insider-trading scandal that is gripping New York.

Hector Ruiz, former chairman and chief executive of Advanced Micro Devices (AMD), the chipmaker, has been accused of giving confidential company information about AMD to a defendant in an alleged insider-trading case involving Galleon Group, according to The Wall Street Journal, citing an unnamed source.

Earlier this month Galleon’s founder, Raj Rajaratnam, one of America's richest men, was charged, along with five other people, in connection with a hedge fund insider-trading case that authorities say generated more than $25 million in illegal profits.

Mr Rajaratnam, who maintains that the charges are "baseless", last week said that Galleon would wind down its funds after publicity surrounding the case led some investors to pull out money. A Galleon source confirmed that it has already liquidated 90 per cent of its assets.

AMD said in a statement that it was investigating the latest allegations. “No current or former AMD employee has been charged with a crime and we’re not aware of any allegation of criminal misconduct,” it said.

According to the Journal, Mr Ruiz is accused of passing the information on AMD to Danielle Chiesi, a defendant in the case who was arrested along with Mr Rajaratnam. Ms Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management, which had assets worth about $1 billion under management, according to court papers.

Before he left AMD, Mr Ruiz was only the second person to run the company other than the founder and long-time chief executive, Jerry Sanders, and was one of the few Hispanic chiefs of a major US corporation.

Mr Ruiz, now 63, left amid mounting investor frustration over AMD's finances. He was instrumental in orchestrating the spin-off of AMD's manufacturing operations into a company called GlobalFoundries, of which he is now chairman.

A GlobalFoundries spokesman on Tuesday would say only that the allegations predate the company's launch.

AMD, which had $5.8 billion in revenue last year, is small compared with its rival Intel, but is significant because it is the world's No 2 maker of microprocessors.

In a separate development, the consulting firm McKinsey & Co said that it has begun an internal investigation of Anil Kumar, a senior partner who is among the defendants in the case.

Mr Kumar was charged with securities fraud and conspiracy for allegedly passing along information to Galleon about some McKinsey clients, including AMD. He denies the charges.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax