| NEW YORK, June 24
NEW YORK, June 24 A former Intel Corp
executive on Tuesday, testifying in the insider trading trial of
Rengan Rajaratnam, told jurors how he leaked details of a major
deal to the former Galleon Group portfolio manager's brother,
The testimony by Rajiv Goel, a former friend of Raj
Rajaratnam, marked the first time jurors heard directly from an
individual who prosecutors say provided illegal tips to the
onetime hedge fund billionaire, who in turn allegedly passed the
information to his younger brother.
Prosecutors played jurors a series of wiretapped phone
conversations between Raj Rajaratnam and Goel, who testified
that he spoke frequently with the Galleon founder about a $1
billion investment Intel planned to make in 2008 in technology
company Clearwire Corp.
"The whole investment was confidential," Goel said.
Prosecutors accuse Rengan Rajaratnam, 43, of conspiring with
his brother to trade on inside information about Clearwire and
Advanced Micro Devices Inc in 2008. He faces three
counts of conspiracy and securities fraud.
Raj Rajaratnam, 57, is serving an 11-year prison term after
being convicted of securities fraud and conspiracy.
On cross-examination, Goel said he had never met Rengan
Rajaratnam until a vacation in Italy arranged with Raj
Rajaratnam following the deal.
Goel said he believed he was "manipulated" by Raj Rajaratnam
to provide inside information and had hoped he would not pass
the tips along to anyone else.
"I did not expect him to," Goel said. "We were friends."
Goel previously testified against Raj Rajaratnam, whom he
met while attending the Wharton School at the University of
Pennsylvania. Goel pleaded guilty to charges stemming from the
insider trading scheme and was sentenced in 2012 to two years of
On Tuesday, he said he provided Raj Rajaratnam tips about
Intel starting in 2007, first about a quarterly earnings report
and then later about the 2008 deal with Clearwire.
In a March 20, 2008, taped phone call played in court, Goel
asked Raj Rajaratnam, "So, did you, uh ... digest the
information I gave you?"
The two then discuss details about the not-yet-announced
deal, including how much money Intel was investing, the value of
a newly created entity, other companies involved in the
transaction and board members of the new company.
For several years before that, Raj Rajaratnam helped Goel
financially, earning his friend $700,000 to $800,000 trading in
his personal account at his request.
Raj Rajaratnam also lent him $100,000 in 2005 in connection
with a home purchase and gave him $500,000 to help keep a family
property in Bombay.
But on cross-examination, Goel acknowledged that he never
told Rengan Rajaratnam about any of the personal benefits he
Rengan Rajaratnam's attorney, Daniel Gitner, has argued that
prosecutors must prove his client knew of any personal benefits
received by tippers in exchange for disclosing confidential
The case is U.S. v. Rajaratnam, U.S. District Court,
Southern District of New York, No. 13-00211.
(Reporting by Nate Raymond in New York; Editing by Noeleen
Walder and Jonathan Oatis)