A California hedge fund manager was charged on Friday with making $900,000 illegally on inside information about three technology companies, the latest strand of the high-profile Galleon Group prosecutions against money managers and traders.

Doug Whitman of Whitman Capital was accused of gleaning secrets about Google Inc and Polycom Inc from trader Roomy Khan, a one-time associate of Raj Rajaratnam, the Galleon hedge fund founder. Rajaratnam was convicted in a high-profile trial last May.

Investigators said Whitman also received inside information on Marvell Technology Group Ltd from Karl Motey, a trader and independent researcher who has pleaded guilty to a criminal charge and is awaiting sentencing. The three companies have not been accused of any wrongdoing.

Whitman pleaded not guilty to the charges. He was ordered released on $1.5 million bail at an appearance on Friday afternoon before U.S. Magistrate Judge James Cott in Manhattan.

Whitman's lawyer, David Anderson of law firm Sidley Austin, said in a statement: Mr. Whitman did not pay any insiders or provide any personal benefit to any insiders for inside information. Anderson said his client had cooperated with the government's investigation.

Federal prosecutors said Whitman made the illegal profit in trading between 2006 and 2009. The U.S. Securities and Exchange Commission filed related civil charges against him. The agency called him a neighbor and friend of Khan.

GALLEON LINK

Dozens of hedge fund managers, traders, consultants, lawyers and executives have been charged since 2009 in a sweep by federal authorities to stop money managers from gaining an illegal edge in the market with inside information.

Evidence provided by Khan about trades in Google and Polycom

was used in the trial of Rajaratnam, who is serving an 11-year prison sentence.

Khan has pleaded guilty to a conspiracy charge. She has yet to be sentenced, and is seeking leniency for having cooperated with the government's probe.

Sanjay Wadhwa, associate director of the SEC's New York office, said in a statement: This action should send a strong signal that the SEC will continue to pursue every angle of the Galleon investigation to hold accountable those who have undermined the integrity of our markets by engaging in illegal insider trading.

Whitman, 54, of Atherton, California, surrendered to FBI agents in New York, the FBI and U.S. prosecutors said. The criminal charges of securities fraud and conspiracy carry a combined possible maximum prison term of 25 years.

Whitman Capital in Menlo Park, California is a private partnership focused on the technology industry, according to the hedge fund's website.

The indictment released on Friday said in 2006 and 2007, Whitman obtained confidential earnings information and other business information from Khan about Polycom and Google.

In exchange, Whitman provided Khan with information about other publicly traded technology companies, the court document said.

From 2007 to 2009, Whitman bought and sold Marvell stock based on confidential earnings, revenue and other financial information provided by Motey. Whitman paid Motey through a soft dollar payment arrangement, prosecutors said.

The case is USA v Doug Whitman in U.S. District Court for the Southern District of New York, No. 12-125.

(Reporting By Grant McCool; Additional reporting by Jonathan Stempel; Editing by Gerald E. McCormick, Matthew Lewis, Dave Zimmerman)