Rajiv Goel, an ex-Intel executive, pleads guilty to securities fraud and conspiracy in connection with the massive Wall Street insider trading scandal
Rajiv Goel, the former Intel executive charged in a massive Wall Street insider trading case, has pleaded guilty to two charges.
Goel made his plea on 8 Feb. in U.S. District Court in New York. The guilty plea was expected after federal prosecutors filed papers on 4 Feb. saying Goel was waiving indictment, an indication that a deal was in the works.
The former managing director in Intel’s treasury department reportedly will be sentenced on 28 May on charges of securities fraud and conspiracy to commit securities fraud. He faces up to 20 years in prison.
Goel was arrested in October in connection with an insider trading scheme that prosecutors say centered around hedge fund Galleon Group and its founder, Raj Rajaratnam. The investigation snared almost two dozen people—including some high-ranking executives of tech companies—and the scheme generated about $20 million in illegal gains.
The case against Rajaratnam and the others is significant not only because of the amount of money involved, but also because of the extensive use by investigators of wiretap technologies, which in the past had been used in probes of organised crime.
Goel admitted to feeding Rajaratnam nonpublic information about Clearwire, a wireless company that Intel had invested in, and about Intel’s quarterly financial numbers. Goel and Rajaratnam are longtime friends, having met about 25 years ago in business school.
During the court hearing, Goel reportedly said Rajaratnam over the years had given him money for personal financial needs, and that he had profited from trades that Rajaratnam had made for him.
He also said he knew that giving insider information to Rajaratnam was wrong, but that he did it out of friendship.
Rajaratnam has denied doing anything illegal.
Goel, who was placed on administrative leave after his arrest and has since left Intel, is the ninth person charged in the case to plead guilty. Prosecutors said he is cooperating with investigators.
Also charged in October was Robert Moffat, who at the time was senior vice president and group executive of IBM’s Systems and Technology Group, and was rumored to be a leading candidate to replace current CEO Sam Palmisano upon his retirement.
Moffat, who is no longer with IBM, is accused of giving nonpublic information to another hedge fund manager, Danielle Chiesi of New Castle Funds, about IBM, Advanced Micro Devices and Sun Microsystems.
According to court documents, Chiesi was recorded several times talking on the telephone about an unnamed AMD executive who also was feeding her information. A number of publications, quoting unnamed sources, said that executive was former AMD CEO Hector Ruiz.
Ruiz, who hasn’t been charged in the case, resigned his position as chairman of Globalfoundries—a chip manufacturing company spun off from AMD—soon after those reports surfaced.