Tuesday, 24 May 2016
Last updated 8 hours ago
Feb 5 2010 | 11:29am ET
Prosecutors in the Galleon Group insider trading case appear poised to win their ninth guilty plea.
Rajiv Goel, a former managing director at Intel Corp., has agreed to waive his right to be indicted by a grand jury, the U.S. Attorney’s office said this week. Instead, he’ll be charged in a criminal information, which generally indicates that a plea agreement has been reached.
Goel was arrested in October and charged with passing confidential tips to Galleon founder Raj Rajaratnam, who has pleaded not guilty. Goel would be the second alleged tipster at Intel to plead guilty; former colleague Roomy Khan, the government’s star witness in the case against Rajaratnam, has already done so and agreed to testify against Rajaratnam, her former boss at Galleon.
According to prosecutors, Goel passed insider-information about both Intel and its clients to Rajaratnam, which Rajaratnam used both for his and his hedge fund’s profit, as well as for Goel’s.
“Rajaratnam placed profitable trades for the benefit of Goel in a personal brokerage account maintained by Goel at Charles Schwab,” prosecutors allege.
Goel would also be the third person to admit passing tips on to Rajaratnam, following Khan and former McKinsey & Co. director Anil Kumar, who claimed that Rajaratnam paid him for information.
It is unclear whether Goel is cooperating with prosecutors. Seven of the eight who have pleaded guilty in the case are doing so; only New Castle Funds co-founder Mark Kurland has pleaded guilty without a cooperation deal. A total of 21 people have been charged in the case, and nine have pleaded not guilty.