Fund manager in Galleon probe names Marvell worker

SAN FRANCISCO/NEW YORK (Reuters) - A top government witness in the Galleon Group insider trading case has admitted to paying an official at a publicly traded technology company in exchange for inside information.

Ali Far, co-founder of the hedge fund Spherix Capital LLC, revealed the payments to an employee at Marvell Technology Group Ltd, according to court records and a person familiar with the matter, in what has become the largest hedge fund insider trading case in U.S. history.

Far made the disclosure in an October 19 hearing, a transcript of which was made public this week.

His disclosure appears to represent the first time a technology official was implicated in the Galleon case for allegedly receiving money in exchange for providing tips.

Some 20 defendants including Raj Rajaratnam, Galleon's billionaire founder, face criminal charges, civil charges or both in the case. Prosecutors have identified $40 million of illegal profits, while the U.S. Securities and Exchange Commission has found $53 million in its civil investigation.

According to the transcript of the October 19 hearing, asked by U.S. District Judge Robert Patterson where cash payments were made and to what company, Far said they were made to a "Sam Neary, who works for Marvel Communications."

This actually refers to Sam Miri, an employee of Marvell, the person familiar with the matter said.

Marvell produces chips that are used in Research in Motion Ltd's BlackBerry phones.

The Santa Clara, California-based company did not immediately return calls for comment. Calls to a Sam Miri listed in nearby Palo Alto were also not immediately returned. The Wall Street Journal earlier reported Miri's involvement.

Far also admitted to trading on inside information on companies including Silicon Valley chipmaker Atheros Communications Inc from 2003 to 2009, sometimes paying for tips with money wired through Spherix's prime broker.

"I knew what I was doing was wrong," Far said.

Ali Hariri, an Atheros vice president, was among those named in criminal complaints last week in the case.

Far is one of at least five defendants who pleaded guilty in the case and are cooperating with federal prosecutors.

A criminal complaint unsealed last week against Far indicates he was swapping information with four technology companies and four hedge fund managers.

Far and Spherix co-founder Richard Choo-Beng Lee each pleaded guilty to securities fraud and conspiracy over their dealings with several publicly traded technology companies and hedge fund employees, leading to what the government called more than $5 million of illicit benefits.

Earlier this month, former Advanced Micro Devices Inc Chief Executive Hector Ruiz stepped down as chairman of contract chipmaker Globalfoundries following reports linking him to the Galleon scheme. He has not been charged, or accused of taking money in exchange for passing on confidential information.

The case is U.S. v. Far, U.S. District Court, Southern District of New York, No. 09-01099.

(Editing by Gerald E. McCormick)