By Bob Van Voris and David Glovin Feb. 9 (Bloomberg) — Rajiv Goel , a former managing director in Intel Corp. ’s treasury group, pleaded guilty in the Galleon Group LLC insider-trading case and will cooperate in the government’s prosecution of Galleon founder Raj Rajaratnam . Goel, 51, pleaded guilty yesterday to conspiracy and securities fraud in federal court in Manhattan and implicated Rajaratnam, whom Goel said he’d known for 25 years, in two insider trades. Goel told U.S. District Judge Alvin Hellerstein that he gave Rajaratnam inside information on Intel earnings and the company’s plan to invest in a publicly traded company in 2007 and 2008. “I gave Rajaratnam the information because of my friendship for him,” Goel said. “I cannot express how sorry I am. I come here to do the right thing.” Goel was the ninth person to admit wrongdoing and the third among them to incriminate Rajaratnam. The top penalty for insider trading is 20 years in prison, prosecutors said yesterday in court. Goel, who is no longer employed by Intel, was arrested Oct. 16 for passing tips to Rajaratnam about a firm that Santa Clara, California-based Intel invested in. Rajaratnam was also arrested that day and has been indicted for using confidential tips to earn millions of dollars in illegal stock trades. In court yesterday, Goel said he and Rajaratnam attended business school together and that Rajaratnam has loaned him money. Goel said he talked to Rajaratnam about Intel’s quarterly results before the numbers were made public. Rajaratnam’s lawyer, John Dowd , declined to comment. Wiretaps Anil Kumar , a former McKinsey & Co. director, pleaded guilty on Jan. 7 and told a judge that he leaked inside information to Rajaratnam. Also pleading guilty and agreeing to testify against Rajaratnam was Roomy Khan , a former Intel executive. Prosecutors say they will use secret government wiretaps in their case against Rajaratnam. According to court papers, Goel leaked news about Clearwire Corp. that he learned from investments made by Intel, and Rajaratnam made about $579,000 in profit. In return, Rajaratnam placed profitable trades for Goel’s benefit in Goel’s personal brokerage account at Charles Schwab Corp., prosecutors said. Another defendant in the case, Danielle Chiesi , has been indicted for trading on inside information and leaking secret tips to Rajaratnam. She has pleaded not guilty. Hellerstein set March 28 for sentencing and let Goel remain free on bail. The case is U.S. v. Goel, 09-mj-02306, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net ; David Glovin in New York federal court at dglovin@bloomberg.net .
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Galleon Tipper Goel Pleads Guilty, Says He Gave Rajaratnam Intel Secrets
