Financial Woes Plagued Galleon Informant

Financial Woes Plagued Galleon Informant - 10/22/2009

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Financial Woes Plagued Galleon Informant
Michael J. de la Merced, Zachery Kouwe and Alex Berenson

New York Times. October 22, 2009
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EXCERPT: Roomy Khan, the central witness who brought down the Galleon hedge fund, is a former Galleon employee with a history of financial trouble who agreed to cooperate with prosecutors after she was caught making trades using inside information. Ms. Khan, previously identified only as “Tipper A” or a cooperating witness, provided much of the evidence that prosecutors are using to bring insider trading charges against the billionaire Raj Rajaratnam, who is shutting down his Galleon fund in the wake of the charges. She taped conversations with him and told prosecutors that she had provided inside information about Google and other stocks. She has agreed to plead guilty to conspiracy and securities fraud and is working with law enforcement in hopes of receiving a lighter sentence, according to the criminal complaint. Ms. Khan, who was identified by people close to the case, has a legal past that may present a hurdle for federal prosecutors. In a lawsuit settled last month, a housekeeper for Ms. Khan and her husband, Sakhawat, said they had violated minimum wage laws by paying her about $250 a week for 80 to 90 hours of work. The lawsuit was settled after a judge said the Khans had fabricated evidence. Mr. and Ms. Khan were also sued in 2005 in New York by Deutsche Bank for failing to repay a large promissory note, though all the details are not listed in the court documents. […] Little public information about Ms. Khan is available. On a 2004 federal campaign donation form, she listed her occupation as stock trader. Until earlier this year, she and her husband lived in a 9,000-square-foot mansion with an assessed value of $13 million in Atherton, Calif., a Silicon Valley suburb of expansive estates.

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