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Former Intel executive pleads guilty to insider trading in Galleon probe

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] Former Intel Capital executive Rajiv Goel pleaded guilty to insider trading charges on Monday in connection with the probe surrounding Galleon Group hedge fund founder Raj Rajaratnam and former hedge fund consultant Danielle Chiesi. The US Attorney's Office for the Southern District of New York alleged that: From 2007 through 2009, Goel and Rajaratnam (who met in the 1980s while attending the same business school) engaged in an insider trading scheme in which Goel obtained material, nonpublic information ("Inside Information") relating to Intel and provided that information to Rajaratnam. Goel provided the Inside Information with the understanding that Rajaratnam would trade on it, in breach of his fiduciary and other duties of trust and confidence owed to Intel. Goel provided Inside Information to Rajaratnam because of his friendship with Rajaratnam, from which Goel benefited in various ways, including financially.Goel pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud. The charges carry a potential 25 year sentence and over 5 million dollars in fines. Goel is the ninth defendant to plead guilty out of 21 charged in the probe.Rajaratnam and Chiesi were arrested in October and charged along with four other individuals and two business entities with insider trading. The complaint alleged that the individuals, including a managing director at Intel Corp., a director at McKinsey & Co., and a senior executive at IBM, provided Galleon Group and another hedge fund with material nonpublic information about several corporations upon which the funds traded, generating $25 million in illicit gain. Rajaratnam and Chiesi pleaded not guilty in December after being indicted for insider trading.

Full post as published by JURIST - The Paper Chase on February 09, 2010 (boomark / email).