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14 charged in Galleon insider trading case
Thursday, November 05, 2009 6:50 PM


(Source: San Jose Mercury News)trackingBy Pete Carey, San Jose Mercury News, Calif.

Nov. 5--Federal prosecutors in New York announced new charges against 14 people in the Galleon insider trading case, including an executive at Atheros Communications in San Jose and five people who already have pleaded guilty in the case, including three from Silicon Valley.

None of them could be reached for comment.

Prosecutors said they have received guilty pleas from Roomy Khan, 51, a stock trader who lived in Atherton but now lives in Fort Lauderdale, Fla., and who is widely believed to be their key informant in the case; and Ali Far, 48, of Saratoga and Richard Choo-Beng Lee, 53, of San Jose, who ran the Spherix hedge fund in San Jose. Spherix shut down earlier this year.

Ali Hariri, 38, of San Francisco, an Atheros executive, was accused of providing inside information about Atheros to a confidential witness who used it to buy hundreds of thousands of shares of Atheros stock. Hariri is a vice president of broadband carrier networking at Atheros, which makes semiconductors for the wireless industry.

Already charged with securities fraud and conspiracy in the case are Galleon Group of hedge funds co-founder Raj Rajaratnam, one of the richest men in America; Intel executive Rajiv Goel, McKinsey consultant Anil Kumar; New Castle hedge fund officers Mark Kurland and Danielle Chiesi, and IBM executive Mark Kurland. All have denied the charges.

Many of the 14 named in the charges announced by prosecutors Thursday were Manhattan area traders. Two are lawyers and one is a former Moody's Investors Service employee who is still at large.

A press release contained details of the charges against Khan, Far and Lee involving unnamed tech companies and hedge funds.

Khan pleaded guilty Oct 19 to conspiracy and securities fraud and obstruction of justice. The government said that from 2006 through November 2007 she conspired with a technology company executive in California; an analyst at a credit ratings agency in New York; an investor relations firm in California; the managers of two hedge funds in New York; the president and principal portfolio manager of a hedge fund in California, and the managing director of a hedge fund in New York. She made $1.6 million on her trades.

Prosecutors said Khan paid some of her sources of inside information with other inside tips on stocks, and with cash and by executing trades in their brokerage accounts. She also admitted deleting incriminating e-mail.

Lee and Far, who founded Spherix, pleaded guilty to securities fraud and wire fraud.




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