Viewpoint: In defense of Hector Ruiz

Only one year after negotiating a significant deal that gave Advanced Micro Devices Inc. a chance to finally improve its overall financial and competitive position, the ex-chairman and CEO of the microprocessor and graphics IC vendor is back in the news, this time for allegedly disclosing confidential information to a "defendant in the Galleon Group insider-trading case."

Interestingly, regulators, criminal investigators and AMD have not confirmed Ruiz as the person who disclosed the information to the Galleon insider trading defendants. In fact, investigators have not even told AMD any of its executives are being investigated although a spokesman confirmed the company is conducting its own internal investigations.

"We are investigating the situation, but we don't have any more detail to discuss publicly," the AMD spokesman said. "No current or former AMD employee has been charged with a crime and we're not aware of any allegation of criminal misconduct. It would be inappropriate to comment further on an ongoing Department of Justice investigation."

We have a situation where Ruiz's name and reputation is being tied to a criminal proceeding that he may or may not be involved with. In the meantime, the controversy continues to build with some industry pundits floating the idea the news could tarnish Ruiz's reputation.

Ruiz will be judged and is being judged by more weighty issues than whether or not a group of people benefitted illegally from information he might have provided to business contacts in the process of extracting AMD from a potential financial disaster.

Even more ridiculous is the contention that both AMD and Globalfoundries, the wafer foundry spun off in a joint venture with Abu Dhabi's Advanced Technology Investment Co., will be negatively impacted by the news.

The extent to which the two companies will be affected by this development cannot be determined currently based on the sparse information provided so far by investigators. At worst, the Ruiz-Galleon controversy represents a distraction to the management of the companies at a time they should be totally focused on operational issues.

The controversy over Ruiz's role is surprising considering the information allegedly disclosed to the Galleon Group was an open secret in the industry last year. While most industry observers might not have had detailed information on AMD's plans, it was known throughout the industry that the company was seeking to reduce costs by relieving itself of the burden of financially supporting the manufacturing division.

It is easy today as AMD appears to be finally putting its financial house in order to forget the company was on life support less than two years ago. In fact, it was obvious from the company's dire financial position that AMD could no longer continue to fund manufacturing on its own.

The options facing AMD included spinning off the manufacturing unit or partnering with investors who could provide the capital it required to maintain the breakneck competition with Intel.

On the other hand, if Ruiz was negligent in the performance of his duty and careless with information he repeatedly insisted on not providing to analysts and other investors during the company's quarterly conference calls, then he should answer in court for his negligence.