plea

By David Glovin and Linda Sandler Nov. 12 (Bloomberg) — Roomy Khan , a former Intel Corp. executive who pleaded guilty to insider trading and is helping prosecutors in a criminal probe of the hedge-fund industry, told a federal judge she gave nonpublic information to several co-conspirators. Khan, who once worked at Raj Rajaratnam’s Galleon Group, made her comments during her Oct. 6 guilty plea in Manhattan federal court. The transcript of the plea was made public today. Khan worked with “several co-conspirators” to trade inside information, she told U.S. Magistrate Judge Debra Freeman in New York during the plea hearing, according to the transcript. She started cooperating with the government in its probe in early 2008, she said. Prosecutors in Manhattan are relying on Khan to help them build a case against Rajaratnam, 52, who was arrested on federal insider trading charges on Oct. 16. Prosecutors say that from 2004 to 2007, Khan conspired with at least eight people to trade on secret tips gleaned from company insiders and others. They say Khan passed on to Rajaratnam and others proprietary details in 2007 about pending takeover bids for Hilton Hotels Corp. and Kronis Inc., plus a tip that Google Inc.’s earnings would be lower than expected, according to court documents. Khan’s lawyer, Stanislao German, was present for the plea, which was sealed until prosecutors made it public last week. She pleaded guilty to conspiracy, securities fraud, and obstruction of justice for deleting an incriminating e-mail. She is seeking leniency in exchange for her cooperation. Rajaratnam has denied wrongdoing and is free on $100 million bail. $53 Million Khan is one of five people who pleaded guilty in the Galleon case. The government so far has charged 20 people and identified illicit profits of $53 million. Information provided by Khan was central to the investigation that led to the arrests of Rajaratnam, who is a billionaire, as well as an Intel unit executive and others in the alleged insider-trading scheme, according to a person familiar with the probe. Separately, Khan pleaded guilty in 2001 to wire fraud and was sentenced year to six months of home detention and ordered to pay $120,000 in restitution, said Joseph Schadler, a spokesman for the Federal Bureau of Investigation. Records of Khan’s criminal case are under seal in federal court in San Jose, California. Rajaratnam’s lawyer, John Dowd , has assailed Khan’s credibility, citing her prior conviction and what he said was her willingness to fabricate evidence in an unrelated court proceeding. In addition to Khan, other cooperators in the U.S. investigation include Ali Far and Richard Choo-Beng Lee , co- founders of San Jose, California-based Spherix Capital LLC, as well as Steven Fortuna and Gautham Shankar , according to court papers. All have pleaded guilty. The case is U.S. v. Khan, 09-cr-991, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net ; Linda Sandler in New York at lsandler@bloomberg.net .