The arrest Friday of New York hedge fund operator Raj Rajaratnam and others in an insider trading case has connections to the Seattle technology industry. Among the stocks that the billionaire Rajaratnam allegedly profited from illegally was Kirkland-based Clearwire, the wireless broadband company which raised $3.2 billion from Intel, Google, Comcast, Trilogy Equity Partners and others last year.

Prosecutors allege that Rajaratnam -- the leader of Galleon Group -- received inside information about the massive financing round in advance from Intel Capital's Rajiv Goel and as a result he was able to make $780,000 in illicit gains on the stock between February and May 2008.

The complaint says:

Between early February 2008 and May 2008, the Galleon Tech funds engaged in three rounds of Clearwire trading, all in close proximity to communications between Goel and Rajaratnam. In all three rounds, the Galleon Tech funds traded in advance of news reports relating to the deal between Clearwire and Sprint.

Rajaratnam also received information in advance about Google earnings, using that tip to sell the stock and make $8 million in profit.

Others charged by the SEC include:

• Danielle Chiesi of New York, N.Y. — a portfolio manager at New Castle Funds.
  
• Rajiv Goel of Los Altos, Calif. — a managing director at Intel Capital, an Intel subsidiary.
  
• Anil Kumar of Saratoga, Calif. — a director at McKinsey & Company.
  
• Mark Kurland of Mount Kisco, N.Y. — a Senior Managing Director and General Partner at New Castle.
  
• Robert Moffat of Ridgefield, Conn. — a senior vice president at IBM.
  
• New Castle Funds LLC — a New York-based hedge fund

The SEC complaint notes that Rajaratnam's "scheme" led to more than $25 million in illicit gains. You can read the full complaint here. [PDF]