Old habits die hard. That's why it's no surprise that the woman who has been fingered as the government's informant in the Galleon Group insider trading case has a bit of a past when it comes to, oh, breaking the law.
Roomy Khan, the hedge fund manager who was identified by the The Wall Street Journal and The New York Times to be "Tipper A" in the Securities and Exchange Commission complaint against Raj Rajaratnam, as well as the CW -- or cooperating witness -- in the criminal complaint filed by the Manhattan U.S. attorney's office, pleaded guilty in 2001 to leaking proprietary information about Intel Corp. (NASDAQ:INTC) to a Galleon representative, according to the San Jose Mercury News.
The two-page court document obtained by the paper states that Khan sent the Galleon representative "non-public and highly confidential information" from Intel, including backlog and billing reports and product pricing and sales data for Intel microprocessors for the first and second fiscal quarters of 1998.
Khan was given a sentence of six months' home detention and ordered to pay a $30,000 fine and $120,000 in restitution. The Galleon representative, who was not identified, did not get charged.
If in indeed Khan is the CW, she has agreed to plead guilty to securities and conspiracy charges for trading secrets with Rajaratnam on Polycom Inc. (NASDAQ:PLCM), Hilton Hotels and Google Inc. (NASDAQ:GOOG). The tipper identified as Khan began cooperating with the government in November 2007 in hopes of receiving a lighter sentence, according to reports.
But here's the question: If authorities knew Galleon received insider information a decade ago, why weren't its analysts being watched more closely much earlier? -
Sara Behunek
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