Informant in Galleon insider-trading case gets a year in prison

Thu Jan 31, 2013 7:08pm EST
 

By Nate Raymond

NEW YORK (Reuters) - Roomy Khan, a one-time technology company executive who became a key FBI informant in the insider-trading case against hedge-fund manager Raj Rajaratnam, was sentenced to 12 months in prison on Thursday.

Her defense lawyer had sought five years of probation for Khan, 54, who pleaded guilty in 2009 to securities fraud, obstruction of justice and conspiracy. U.S. District Judge Jed Rakoff in Manhattan also ordered her to forfeit nearly $1.53 million.

"As I reflect back, I am horrified by the choices I made," Khan said.

Khan is one of only a few women who have been charged in the government's broad insider-trading crackdown, which has involved money managers, traders, consultants and lawyers.

Her cooperation helped U.S. authorities in the Rajaratnam prosecution. Rajaratnam, founder of the Galleon Group, was convicted by a federal jury in May 2011 and is serving an 11-year prison term.

She was also called as a government witnesses at the insider trading trial of Doug Whitman, a California hedge fund manager and founder of Whitman Capital LLC who was sentenced last week to two years in prison.

Prosecutors said Khan also obstructed the investigation, alerting co-conspirators that the U.S. Securities and Exchange Commission had contacted her and deleting email communications.

Khan, whose voice broke up during her sentencing, said she was sorry, not just to the court but also to her daughter, husband and parents.   Continued...

 
Roomy Khan, the former Intel executive exits the Manhattan Federal Courthouse with her lawyer (L) following her sentencing in New York January 31, 2013. Khan, a one-time technology company executive who became a key FBI informant in the insider-trading case against hedge-fund manager Raj Rajaratnam, was sentenced to 12 months in prison on Thursday. Defense lawyers had sought five years of probation for Khan, 58, who pleaded guilty in 2009 in U.S. District Court in Manhattan to securities fraud, obstruction of justice and conspiracy. REUTERS/Brendan McDermid