A former Intel Capital director pleaded guilty on Monday to fraud in the Galleon insider trading case, telling a New York court that hedge fund founder Raj Rajaratnam gave him money for personal needs and that he profited from illegal trades.
Rajiv Goel, who was arrested in San Jose, California, last October 16, said he conspired with his longtime friend Rajaratnam in 2007 on confidential information about Intel Corp
Intel Capital is the venture capital arm of Intel Corp. Goel, a former director in the treasury group, left in December, the company said last month. Intel spokesman Chuck Molloy declined to comment Goel's plea.
Goel is the ninth to plead guilty among 21 individuals facing criminal or civil charges in the probe that shook Wall Street and Silicon Valley and marked new ground in white collar crime with investigators' use of wiretaps to gather evidence.
Although we lived very different lives, we kept in close contact and I received money from him for personal financial needs, Goel told Manhattan federal court Judge Alvin Hellerstein. Over a number of years, he made trades that made me profits.
The case has drawn wide attention because it included allegations against a well-known hedge fund figure in Sri Lankan-born Rajaratnam and employees of some of America's best-known companies, including International Business Machines Corp
Goel pleaded guilty to conspiracy to commit securities fraud and securities fraud. U.S. prosecutors said Goel, 51, is cooperating with their investigation.
A representative for Rajaratman's lawyer declined to comment on Goel's statement in court.
I know it was wrong to give Raj Rajaratnam the information. I gave it to him because of my friendship, said Goel, who met the Galleon founder about 25 years ago at the Wharton School of Business at University of Pennsylvania.
The charges carry a prison sentence of up to 20 years. A sentencing proceeding was scheduled for May 28.
In the broader Galleon probe, U.S. prosecutors accused stock traders, lawyers, fund managers and executives of trading on tips about forthcoming mergers and acquisitions, mostly in tech stocks.
Rajaratnam and an accused New Castle Funds LLC hedge fund employee, Danielle Chiesi, have pleaded not guilty to an indictment on conspiracy to commit securities fraud and securities fraud charges.
Seven other people were arrested last November 5. Some of them had previously been employed at Galleon but were working at different trading companies when they were charged. All pleaded not guilty to indictments on similar charges. At least two other accused are in discussions with U.S. prosecutors on resolving their cases.
The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
(Reporting by Grant McCool, additional reporting Ian Sherr; editing by Andre Grenon, Gary Hill)