The allegations are from Paul Feldman, who is the former CEO of Law Enforcement Associates, a security technology company based in Youngsville, NC. Feldman was fired from his position as CEO in August.
In a letter to the Federal Department of Labor, Feldman says he was fired because he was cooperating with a federal investigation.
Feldman claims the company, LEA, was breaking federal export laws and Rand illegally profited from the sale of stock in Raleigh-based First Citizens Bank.
Feldman alleges, "Rand said he had done so based on inside information he obtained from Frank Holding."
Holding is the president of First Citizens Bank and a personal friend of Rand. Rand said he bought the bank's stock at $60 per share and sold it at over $700 a share.
Rand says he's targeted only because he's a well-known Democrat.
Feldman's letter to the Department of Labor is dated November 17 -- 13 days after Rand announced he was stepping down from his state Senate seat to join Governor Beverly Perdue's administration as chair of the parole commission.
Feldman and former sales director Martin Perry claim to have viewed a company document which they say shows a ring of illegal insider trading, which they say included as many as 50 state politicians, including the former and current governors.
The document and the names have not been made public.
"It's a shocking letter," political activist Joe Sinsheimer said. "It's just an allegation at this point, but it's going to demand attention from federal investigators."
Lawyers for the former LEA execs say they stand firm behind the allegations.
"This was definitely the Democratic Party's great fear, was that the Easley investigation would spread into a much larger inquiry into the nexus between business and politics in North Carolina and corruption," Sinsheimer said.
State ethics forms do show Easley owning at least $10,000 in LEA stock in 2007 and 2008 and Governor Perdue owning at least $10,000 in LEA stock in 2006.
But a spokesperson for Governor Perdue said Wednesday allegations of insider trading are not only untrue, but outrageous.
They say Perdue bought $1,000 of LEA stock in 2002 and to date they say she has never sold it.
LEA has also filed a letter with the Securities and Exchange Commission, denying the allegations. However, LEA is involved in its own internal investigation of the allegations.