Fund manager in Galleon probe names Marvell worker

Wed Nov 11, 2009 3:27pm EST
 
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* Ali Far says got tips in exchange for cash payments

* Far says Marvell's Sam Miri is involved-source

* Marvell, Miri not available for comment

By Alexei Oreskovic and Jonathan Stempel

SAN FRANCISCO/NEW YORK, Nov 11 (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 (MRVL.O), 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 the disclosure in an Oct. 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 Oct. 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 (RIM.TO) (RIMM.O) 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 (ATHR.O) 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.  Continued...

 

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