U.S. will not oppose unsealing Khan insider record

NEW YORK (Reuters) - Prosecutors in California will not oppose a request by Galleon Group founder Raj Rajaratnam to make public the criminal record of Roomy Khan, one of several people cooperating with the U.S. government's probe of its biggest hedge fund insider trading case.

A document filed on Tuesday by Stephen Mansfield, one of Rajaratnam's lawyers, included an email to Mansfield by Assistant U.S. Attorney Thomas Stevens: "Yes, we notified the court late Friday afternoon re: non-opposition."

On November 13, lawyers for Rajaratnam asked the U.S. District Court in San Jose, California, to unseal the records of Khan, a former employee of Intel Corp. They argued that making the records public was important to Rajaratnam's defense.

Khan was charged with one count of wire fraud in federal court in California in 2001 and pleaded guilty in 2002, drawing a sentence of home confinement.

"I understand that the government moved initially to seal the case file in this matter," Mansfield said in Tuesday's brief. "Now that the government has decided to not oppose our motion to unseal the file, it is my understanding that our motion is now unopposed."

U.S. Attorney spokesman Jack Gillund declined to comment.

Khan, 51, worked for Intel more than 10 years ago. Prosecutors are relying on her and several other cooperating witnesses in their case against Rajaratnam and others. The Sri Lankan-born billionaire's lead attorney, John Dowd, said in a brief in Manhattan federal court in New York last month that he was confident he could win any trial.

Some 20 defendants face criminal charges, civil charges or both in the New York court in an investigation that was made public on October 16 and widened with more charges on November 5.

The allegations by U.S. prosecutors said they have identified $40 million of illegal profits, while the U.S. Securities and Exchange Commission said it found $53 million in its civil investigation.

Khan is one of at least five people who have pleaded guilty to charges in the case, hoping to receive a reduced sentence for their cooperation with the government's investigation. Khan pleaded guilty on October 19 and she was released on $500,000 bond after surrendering her passport.

She told a U.S. judge that she provided confidential information to several co-conspirators, according to a transcript of the hearing.

The case, which misspells Khan's last name, is U.S. v. Kahn, U.S. District Court, Northern District of California, No. 01-cr-20029.

(Reporting by Grant McCool, additional reporting by Gina Keating, editing by Matthew Lewis)