Former Intel Capital executive Rajiv Goel on Monday pleaded guilty to fraud in New York and told a federal judge that Galleon Management founder and co-defendant Raj Rajaratnam gave him money and made illegal stock trades on his behalf, according to news reports.
"Although we lived very different lives, we kept in close contact and I received money from him for personal financial needs," Goel, who was Intel Capital director of strategic investments, told Manhattan federal court Judge Alvin Hellerstein, according to Reuters. "Over a number of years, he made trades that made me profits."
Specifically, the complaint against Goel stated that he had netted $50,000 in profit from trades of PeopleSupport stock that Rajaratnam made on his behalf in October 2008.
Goel became the ninth individual to plead guilty in an insider trading scandal that led to a string of arrests late last year and involved executives from such high-profile technology companies as Intel and IBM. Four others, including former IBM executive Robert Moffat, were named in the initial series of charges filed by federal authorities in October 2009.
"I know it was wrong to give Raj Rajaratnam the information. I gave it to him because of my friendship," Goel said, according to Reuters. The ex-Intel executive went to business school with Rajaratnam more than two decades ago, according to reports.
Goel pleaded guilty to conspiracy to commit securities fraud and securities fraud, having been charged with supplying Rajaratnam with inside information about Intel's quarterly earnings and its investment in wireless Internet service provider Clearwire.
The case against Goel was based on extensive federal wiretapping of telephone calls made by Rajaratnam. Goel's discussions of Clearwire with Rajaratnam began in March 2008, according to prosecutors, when Goel shared confidential information about the progress of a large, multi-party investment in company that involved Intel, Sprint and other parties.
Rajaratnam's hedge fund allegedly made $579,000 in profits from transactions involving Clearwire stock. Rajaratnam has pled not guilty to fraud charges.
Sentencing for Goel, who faces up to 20 years in prison, was set for May 28, according to reports.
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