U.S. prosecutors may bring charges for ignoring the source of illegal information used for trading, an appeals court ruled in its second decision in as many days widening the scope and penalties for insider cases.
The jury in the insider-trading case of Whitman Capital LLC founder Doug Whitman was told by a key witness, Roomy Khan, that Whitman “aggressively” pressed her to pursue leaks from her sources, whom he referred to as Khan’s “moles.”
Roomy Khan, the former Intel Corp. executive twice convicted of passing illegal tips to Raj Rajaratnam, is asking a judge to let her stay out of prison so she can help young people in finance “not fall to the temptation of easy money with insider trading.”
Roomy Khan, who began meeting with the FBI almost five years ago as agents probed Galleon Group LLC co-founder Raj Rajaratnam, broke down in tears as she testified about the many lies she told investigators.
One late afternoon in March 2007, Sanjay Wadhwa sat at his desk transfixed by the data on his computer screen. Wadhwa was then a low-level supervisor in the Wall Street office of the U.S. Securities and Exchange Commission investigating a supposedly routine case of “cherry- picking.” The SEC had gotten a complaint that Rengan Rajaratnam, the founder of Sedna Capital Management LLC, a small hedge fund, was doling out a disproportionate share of his best trades to the beneficiaries of a “friends and family” account. It was Wadhwa’s job to figure out what was going on, Bloomberg Businessweek reports in its April 23 issue.
Roomy Khan, a key government informant who twice pleaded guilty to passing inside information to Galleon Group fund manager Raj Rajaratnam, took the stand as a witness in the trial of Whitman Capital LLC’s Doug Whitman.
Whitman Capital LLC’s Doug Whitman told jurors that he continued to seek information from Roomy Khan, a key prosecution witness against him, even after he concluded she had tried to pass him illegal inside information.
Whitman Capital LLC’s Doug Whitman told jurors that he refrained from trading the stock of Polycom Inc. when he first suspected that Roomy Khan, a key government witness in his prosecution, was getting illegal inside information.
Roomy Khan, a former Intel Corp. executive at the center of the biggest stock-tipping probe in U.S. history, should get leniency when she’s sentenced this week because she helped the government convict Raj Rajaratnam, Doug Whitman and others, U.S. prosecutors said.