October 23, 2009 / 11:42 PM / 9 years ago

IR firm tipster in Galleon case sought no money-lawyer

* Shammara Hussain’s lawyer says she got no compensation

* Hussein worked at Market Street Partners for few months

* Investor relations firm considering legal action

* One of several employees handling Google account

By Clare Baldwin and Anupreeta Das

SAN FRANCISCO/NEW YORK, Oct 23 (Reuters) - The investor relations firm employee who is believed to have tipped off an informant of Galleon Group about Google Inc’s (GOOG.O) earnings did not ask for or get compensation, her lawyer said.

Shammara Hussain is the Market Street Partners employee who regulators believe leaked information to the Galleon informant and sought money to continue supplying tips, people familiar with the matter said on Friday. Regulators did not release the employee’s name in their complaints.

“Absolutely not. There is no money, no expectation of money,” Julia Jayne said of the allegation that her client had sought money in exchange for tips.

“The rumor or some sort of suggestion is that she asked for compensation and that is not true,” Jayne said.

According to regulators’ complaints, an employee at Market Street Partners tipped off a Galleon informant in July 2007 that Google’s earnings would be below market expectations.

Galleon traded on that information, netting a profit of $9 million, the biggest illegal trades identified in the complaints.

Regulators last week brought criminal charges against Galleon’s billionaire co-founder, Raj Rajaratnam, and five others in the biggest hedge fund insider trading scandal ever.

The sources said Hussain, who is now 23, worked for a few months at San Francisco-based Market Street in 2007.

Jayne, founding partner at law firm Campbell & Jayne LLP, would not confirm or deny that Hussain was the employee mentioned in the complaints.

The U.S. Securities and Exchange Commission said the Market Street tipster demanded $100,000 to $150,000 per quarter to keep furnishing the Galleon informant with tips.

The informant — identified in media reports as Roomy Khan, a former Galleon employee — demurred and the Market Street source stopped providing tips, the SEC said.

“Whatever her conversation was with people — and I’m not even saying she instigated it whatsoever — was really just a result of naivete, and not really an understanding of the appropriateness of doing that and the ramifications of it,” Jayne said.

“She was 21 at the time. This was her first real job out of college,” Jayne said in an interview. “She is a very sweet girl and wants very much for nothing to happen to Market Street Partners because she never meant to hurt them or anybody.”

Hussain wants to cooperate with the investigation, she said.

A lawyer for the tiny investor relations firm said in a statement on Wednesday that it was examining whether to pursue legal action against the person who leaked the Google information.

Google, Market Street’s biggest client, has suspended the firm’s services while it conducts its own investigation.

Hussain, a junior employee who was one of several people handling the Google account, was fired for writing blog posts that conflicted with her employment agreement, two of the sources said.

“It was somebody who was a very junior person on the Google account and who stayed with the firm for just a few months and was actually let go for ethical violations,” one source said.

All the sources spoke anonymously because Hussain has not been named in the complaints.

Starting salaries at Market Street range between $30,000 to $50,000 a year, the sources said.

Investor relations firms act as go-betweens for companies and Wall Street by helping to prepare announcements, arranging roadshows and encouraging investment in their clients’ stock.

Most large companies, including Google, have their own investor relations departments but occasionally hire outside firms.

Market Street is one of a handful of tiny investor relations firms in California’s Silicon Valley.

Google is by far the largest client listed on its website, but the firm also handles work for NetSuite Inc N.N and Omniture Inc OMTR.O. It lists seven employees on its LinkedIn profile.

Google’s use of Market Street — a firm very few people outside the investor relations community have heard of — may seem unusual, but for the fact that is centered on a specific relationship.

Google’s current investor relations manager, Maria Shim, is a former Market Street employee. The firm got Google’s business after Shim moved to the Internet company in 2006, other sources told Reuters previously. Google has not commented. (Reporting by Clare Baldwin and Anupreeta Das; additional reporting by Emily Chasan; Editing by Ted Kerr)

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