Former Intel Exec Sentenced For Fraud
NEW YORK (AP) -- A former Intel Corp. executive who fed confidential information to a billionaire hedge fund founder accused in a massive insider trading case earned leniency on Monday at his own sentencing.
Rajiv Goel, who gave information about the computer chipmaker to hedge fund founder and former schoolmate Raj Rajaratnam, apologized and said he was "deeply ashamed." He was sentenced by U.S. District Judge Barbara Jones to two years of probation, was fined $10,000 and was ordered to forfeit $266,000.
Goel, 54, had faced up to 25 years in prison. He said, "I had a serious lapse of judgment and good sense."
Goel, of Los Altos, California, was a director of strategic investments at Intel's investment arm, Intel Capital, until he left in 2009. He admitted supplying secret details about Intel's investments to Rajaratnam, who is serving an 11-year prison sentence after he was convicted of securities fraud charges for making insider trades that the government claimed earned him $75 million illegally.
Prosecutors had called the case against Rajaratnam the biggest insider trading probe in history. It resulted in the convictions of more than two dozen people and led to a spinoff probe of Wall Street researchers who enabled corrupt public company employees to pass along inside information as legitimate research to hedge fund managers. The investigation also made unprecedented use of wiretaps, allowing jurors at Rajaratnam's trial to hear dozens of taped conversations between him and co-conspirators.
Rajaratnam, founder of the Galleon Group funds, argued that the tapes revealed nothing more than him doing his duty by asking questions about information already circulating in the "real world" of high finance.
Goel's defense attorney, David Zornow, said his client met Rajaratnam at the University of Pennsylvania's Wharton School of Business in the early 1980s and rekindled a friendship after the Sept. 11, 2001, terrorist attacks. He called Rajaratnam a "master manipulator" and a "corrupter of friends" who was larger than life to Goel, who came to the United States from India in the early 1980s to go to school.
Zornow said his client had "a unique relationship with a guy who frankly played Mr. Goel like a fiddle."
Goel admitted at Rajaratnam's trial that he gave Rajaratnam, who is from Sri Lanka, inside tips about Intel's investments and returns in 2007 and 2008.
Assistant U.S. Attorney Reed Brodsky said Goel did everything he could after his arrest to make up for his crimes, including continuing to cooperate even after Rajaratnam's trial. He called Goel's testimony "very powerful."
The judge, before she announced the fraud sentence, said Goel "showed good sense in deciding to cooperate." She noted that two other people who cooperated also had received probation.