Rajiv Goel, who worked in Intel’s treasury group, told a federal jury how he passed confidential information to his “pal” Raj Rajaratnam, the Galleon Group co-founder on trial for insider trading.
Goel, who is testifying for prosecutors in a bid for leniency after pleading guilty to conspiracy and securities fraud, took the witness stand and said he told Rajaratnam about Intel’s earnings in 2007 and a $1 billion transaction in 2008.
“Raj and I were very good friends,” Goel, 52, testified, as Rajaratnam watched from across the well of the courtroom in lower Manhattan. “He was a good man to me. I was a good pal, a good person to him, so I gave him the information.”
Goel, who was a managing director at Intel, is the second government cooperator to directly implicate Rajaratnam in insider trading. Anil Kumar, a former McKinsey & Co partner who also pleaded guilty, earlier testified about information he leaked about clients. Other government witnesses have also testified about leaks to Rajaratnam.
Rajaratnam, 53, is on trial in the largest crackdown on hedge-fund insider trading in US history. The Sri Lankan-born money manager is accused of making $45 million from tips leaked by corporate insiders and hedge fund traders.
Wharton School
Rajaratnam says his trades were based on legitimate research, and his lawyers say Goel is accusing Rajaratnam to save himself from a long prison term.
In court today, Goel said he and Rajaratnam became friends at the Wharton School at the University of Pennsylvania, from which they graduated in 1983, and grew close over ensuing years. The families vacationed together, said Goel, a native of Mumbai.
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After returning to the US from India and winning a job at Intel in 2000, Goel said he repeatedly turned to Rajaratnam for financial assistance. Rajaratnam loaned Goel $100,000 to buy a home in 2005 and another $500,000 the next year when Goel needed support for his ailing father, Goel said.
Goel put the $500,000 in a Swiss bank and used a portion to remedy a rat problem in his new house in California, he said. Goel didn’t report the gift to the Internal Revenue Service (IRS), he said.
Goel said he and Rajaratnam shared confidences. In 2003, Rajaratnam told Goel that two women who worked in Intel’s sales department had leaked information to him, and Rajaratnam gave each of them a BMW car in return, Goel testified.
“He gave them the keys,” Goel said. Goel didn’t identify the two women. Roomy Khan, a former Intel executive and stock trader, has pleaded guilty to insider trading and is cooperating with prosecutors.