Global Foundries’ Hector Ruiz Out the Door

Former AMD Chief Hector Ruiz is out the door at spinoff Global Foundries, taking a leave and then resigning after being linked to insider trading.

AMD spinoff Global Foundries has announced that former AMD head Hector Ruiz will be taking a leave of absence and then resigning as chairman of Global Foundries effective January 4, 2010. Ruiz’s decision to leave Global Foundries follows his being identified last week by The Wall Street Journal as one of the sources of inside information in the Galleon hedge fund fracas, in which an “AMD executive” allegedly gave New Castle hedge fund representative Danielle Chiesi an ongoing summary of AMD’s negotiations to spin off Global Foundries into a separate company and run AMD as a fabless chipmaker.

According to Global Foundries, Ruiz submitted his resignation in September, but the company has only gotten around to releasing the information now. Ruiz will be succeeded a Global Foundries’ chairman by Alan Ross until a permanent replacement can be found.

As head of AMD throughout much of the 2002s, Ruiz helped raise AMD’s profile and make the company a series rival to giant chipmaker Intel, even while alleging Intel engaged in anticompetitive and monopolistic practices in the worldwide chip market—cases which are still going forward around the world. Ruiz also moved to acquire graphics developer ATI Technologies in 2006, a deal that the company has since repeatedly written down in value. As AMD’s costs rose and sales declined (in part due to an infamously buggy CPU), Ruiz moved to separate the company’s chip manufacturing business from AMD, leading to the creation of Global Foundries, with significant financial backing from Middle East investors.

As part of the Galleon hedge fund scandal, charges of securities fraud have been filed against Danielle Chiesi, Galleon co-founder Raj Rajaratnam, and four others, alleging in part that the hedge fund operators acquired thousands of shares of AMD and related stocks based on insider information supplied to them by sources, including Ruiz, although Ruiz was not named in the indictment.