A former executive of Intel admitted in court on Monday that he had leaked confidential corporate information to his close friend Raj Rajaratnam, founder of the Galleon Group hedge fund.
He adds to a list of cooperating witnesses that federal prosecutors are using to build a case in a wide-ranging insider-trading scandal.
The executive, Rajiv Goel, said at a court hearing that his friendship with Mr. Rajaratnam began 25 years ago when the two attended the Wharton School of the University of Pennsylvania.
Mr. Goel said he provided Mr. Rajaratnam in 2007 with inside information about Intel’s financial condition before it was released. He also tipped Galleon’s founder about a pending joint venture between the Clearwire Corp. and Sprint Nextel, a deal in which the chip-maker Intel planned to invest $1 billion. Mr. Goel was a managing director in Intel’s treasury department until he left the company in late January.
While they lived on different coasts, the men kept in touch regularly and their families vacationed together, said Mr. Goel in U.S. District Court in Manhattan. Mr. Rajaratnam twice gave Mr. Goel money for “personal financial reasons” and often asked Mr. Goel questions about Intel.
Prosecutors said had Mr. Goel not pleaded guilty, they were prepared to prove that he had committed the crimes, in part, with wiretapped recordings of Mr. Rajaratnam in 2008. Agents for the FBI secretly listened to numerous conversations Mr. Rajaratnam had with various sources of insider tips that resulted in over $50 million in gains for Galleon, according to prosecutors. “I gave Rajaratnam the information because of my friendship for him,” Mr. Goel said in court. “I cannot express how sorry I am. I come here to do the right thing.” — © 2010 The New York Times News Service