A former Intel Corp executive,whose trial testimony helped convict hedge fund titan Raj Rajaratnam,avoided prison time on Monday for his role in the biggest insider-trading prosecution of a generation.
Rajiv Goel is the third former friend and business associate,who testified against Rajaratnam at his 2011 Manhattan federal court trial,to be handed a sentence of probation. Goel is among scores of fund managers,traders,lawyers,executives and consultants caught in a U.S. government crackdown on Wall Street insider trading in the past four years.
In sentencing Goel,54,to two years probation,U.S. District Judge Barbara Jones said his cooperation with the government did go beyond ordinary assistance,which his lawyers and prosecutors described in their pre-sentencing briefs. Jones fined Goel $10,000 and ordered him to forfeit $266,000.
Goel,who has not worked since losing his job as treasury group manager with chipmaker Intel following his October 2009 arrest,pleaded guilty in February 2010 to being part of Rajaratnam’s network of insiders feeding him corporate secrets.
The charges of securities fraud and conspiracy carried a maximum prison term of 25 years. Galleon Group hedge fund founder Rajaratnam,who was convicted of 14 charges of securities fraud and conspiracy by a jury,is serving an 11-year prison term.
Rajaratnam’s appeal of secretly recorded telephone calls used by the FBI to gather evidence is scheduled to be heard on Oct. 25.
Goel told the sentencing judge that in helping Rajaratnam,I had a serious lapse of judgment and good sense and I deeply apologize … I hope that I am given another chance to repair the harm that I have caused.
His lawyer,David Zornow,in requesting a non-custodial sentence,described Rajaratnam as a master manipulator and a clever seducer of his friends.
At Rajaratnam’s trial,Goel told the jury that they met at Wharton School of the University of Pennsylvania in the early 1980s. In 2007 and 2008,Goel gave Rajaratnam confidential information about Intel’s business.
U.S. prosecutor Reed Brodsky told the judge on Monday that Goel’s cooperation and testimony were essential in a very significant prosecution for the government. Brodsky said Goel’s assistance was relevant in six of the 14 charges against Rajaratnam.
Two other former associates of Rajaratnam were also sentenced to two years probation following their trial testimony. They were Anil Kumar,a former McKinsey & Co consultant who also met Rajaratnam at Wharton,and former Galleon money manager Adam Smith.
The case is: USA v Rajiv Goel in U.S. District Court for the Southern District of New York,No. 10-90.