As expected, Rajiv Goel, an ex-Intel treasury department executive, pleads guilty to securities fraud and conspiracy in connection with the massive Wall Street insider trading scandal. Goel faces up to 20 years in prison when he is sentenced in May. Prosecutors say he is cooperating with investigators.
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 Feb. 8 in U.S. District Court in New
York. The guilty
plea was expected after federal prosecutors filed papers Feb. 4 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 May 28 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 organized 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
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.