Tuesday, 22 July 2014
Last updated 5 hours ago
Oct 22 2009 | 1:09pm ET
The woman at the center of the case against Galleon Group founder Raj Rajaratnam has been identified as a hedge fund manager and former Galleon employee.
Roomy Khan is the person identified as the “cooperating witness” in the criminal complaint filed against Rajaratnam and five other alleged members of the insider-trading scheme. According to the complaint, the cooperating witness or “CW,” who has agreed to plead guilty to conspiracy and securities fraud charges, was the source of information for several of the alleged insider-trades at the heart of the government’s case against Rajaratnam.
According to The Wall Street Journal, which first identified Khan as the witness in question, Kahn worked briefly for Galleon in the late 1990s. But she ran into financial difficulties earlier this decade—last year her former maid sued Khan and her husband, alleging they owed her money—and reapplied at Galleon. She didn’t get the job, but during her interview, Rajaratnam asked if she has access to any inside information about any public companies.
The complaint says she offered tips about Polycom Inc. “in the hopes of securing a position with Galleon, and in anticipation of receiving future insider tips from Mr. Rajaratnam in exchange.” She later alleged “arranged to pay” a Moody’s Investor Service analyst $10,000 for a tip about the takeover of Hilton Hotels, and was also the alleged source of insider-information about Google Inc. Khan’s tips allegedly earned Galleon $13 million, the bulk of its supposed profits from the scam, and Khan herself $1.5 million.
Deep Shah, previously identified as the Moody’s analyst who passed on the Hilton tip, yesterday denied the allegation.
“I don’t know anything about this,” Shah told the Journal.
Khan, or whoever “CW” is, began cooperating with the government in November 2007. In addition to providing the government with information about the tips she had passed on, she taped conversations with Rajaratnam.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…