Rajaratnam Asks California Court to Unseal Khan Case

Rajaratnam Asks California Court to Unseal Khan Case - 11/13/2009

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Rajaratnam Asks California Court to Unseal Khan Case
David Glovin

Bloomberg. November 13, 2009
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EXCERPT: Lawyers for Raj Rajaratnam, the Galleon Group LLC founder who faces federal insider trading charges, said he was “completely unaware” of a 2001 criminal case against his chief accuser, former Intel Corp. executive Roomy Khan. Khan, who also once worked at Galleon, is the government’s star witness in an insider trading case brought last month against Rajaratnam, in which she has pleaded guilty. In addition, Khan pleaded guilty in federal court in California to charges that she leaked tips about Intel, her employer at the time, to an unidentified person at Galleon. Lawyers for Rajaratnam yesterday asked a federal judge in San Jose, California to unseal the 2001 case, saying it’s “vitally important” that they obtain the records. The lawyers say Rajaratnam didn’t know of that case until it was reported in the media last month. “Rajaratnam was completely unaware of the transaction, the government’s investigation of defendant Khan, and the existence of the criminal” documents, attorney Stephen Mansfield wrote in court papers yesterday. He said the documents, once unsealed, will counter a suggestion in media reports of “a prior scheme between defendant Khan and Mr. Rajaratnam.” […] Khan allegedly passed on to Rajaratnam and others proprietary details in 2007 about pending takeover bids for Hilton Hotels Corp. and Kronos Inc., plus a tip that Google Inc.’s earnings would be lower than expected, according to court documents. Khan is among five people who pleaded guilty in the Galleon case and are cooperating with prosecutors. The government has charged 20 people who they say earned as much as $53 million through illegal trades. Information provided by Khan was central to the investigation, according to a person familiar with the probe. Prosecutors say they’ll also use other witnesses and telephone wiretaps to establish their case.

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