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Ex-Intel executive pleads guilty to fraud

Ex-Intel executive pleads guilty to fraud
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First Published: Tue, Feb 09 2010. 12 20 PM IST
Updated: Tue, Feb 09 2010. 12 20 PM IST
New York: A former Intel executive pleaded guilty Monday to charges he fed confidential information about the computer-chip maker to wealthy hedge fund manager Raj Rajaratnam, his old friend and central figure in a massive insider trading case.
“I gave Raj Rajaratnam the information because of my friendship with him,” Rajiv Goel told a judge in federal court in Manhattan. “I cannot express how sorry I am.”
Goel, 51, of Los Altos, Calfornia, became the ninth defendant to plead guilty out of 21 charged so far in the case. He faces up to 20 years in prison at sentencing on 28 May but could receive far less time because he agreed to cooperate with the investigation as part of a plea deal.
Prosecutors allege Rajaratnam, the Sri Lanka-born portfolio manager for the Galleon Group hedge fund, pocketed up to $50 million through a network of cheating executives at financial firms and companies privy to inside information. He denies wrongdoing.
Goel, a resident of Los Altos, California, was a director of strategic investments at Intel Capital, the investment arm of Intel Corp., until he left the company last year.
He was arrested in October on conspiracy and securities fraud charges alleging that he supplied secret details about Intel’s investments to Rajaratnam — conversations prosecutors say were caught on wiretaps. Rajaratnam allegedly made a profit of $579,000 off the information and paid Goel through a personal brokerage account.
In his plea, Goel said he met Rajaratnam after coming from India to attend the University of Pennsylvania’s Wharton School of Business in the early 1980s. After the two graduated and Rajaratnam built a hedge fund empire that made him one of the richest men in America, they remained close friends who sometimes took family vacations together, he said.
“Though we lived very different lives, we maintained a strong connection,” he said.
Goel admitted giving Rajaratnam inside tips about Intel’s investments and returns in 2007 and 2008.
“I knew it was wrong to give Raj Rajaratnam confidential information,” he said.
Goel remains free on $750,000 bail.
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First Published: Tue, Feb 09 2010. 12 20 PM IST