Nov. 11 (Bloomberg) -- Ali Far, a hedge-fund manager who pleaded guilty to insider trading and is helping prosecutors in a probe of the industry, told a judge he had payoffs made to a person at a company called Marvell in return for inside information.

Far made his comments while pleading guilty on Oct. 19, a transcript of which became publicly available yesterday. While the company is described in the transcript as Marvel Communications, the person identified by Far, Sam Miri, was affiliated with Marvell Technology Group Ltd. in Santa Clara, California. Marvell, which is registered in Hamilton, Bermuda, is the maker of the processor that runs Blackberry smart phones.

“You said that cash payments were made to, to whom? To what company?” U.S. District Judge Robert Patterson in New York asked Far during the plea hearing, according to the transcript.

Far replied that the payments were made to a “gentleman” who “works for Marvel Communications,” according to the transcript.

Far, 48, who once worked for Galleon Group founder Raj Rajaratnam and co-founded Spherix Capital LLC in 2007, traded on inside information about companies including Atheros Communications Inc. from 2003 to 2009, at times paying for tips with money wired through Spherix’s broker, he told the judge.

“I knew what I was doing was wrong,” he said.

Far’s lawyer, Steven Kobre, couldn’t immediately be reached for comment yesterday. Miri confirmed yesterday in a phone call to his home in Palo Alto, California, that he worked for Marvell and declined to comment further when asked about Far and the transcript. No criminal charges against Miri have been announced.

Jeff Palmer, an investor relations executive at Marvell, didn’t immediately respond to a call and e-mail seeking comment yesterday.

$53 Million

Far is one of five people who pleaded guilty in the case involving Rajaratnam in which the government so far has charged 20 people and identified illicit profits of $53 million.

Cooperating in the investigation are Far and Richard Choo- Beng Lee, his co-founder of San Jose, California-based Spherix, as well as Steven Fortuna,Gautham Shankar and Roomy Khan. Their guilty pleas were made public on Nov. 5.

From about 2003 through March 2009, Far conspired with his Spherix partner and others to trade technology companies using inside information, making profits of more than $5 million in Spherix accounts, the government has said in court documents. Tippers were paid in information or cash -- in some cases as little as $2,000 a quarter, it said.

Secret Tips

The transcript of the plea hearing elaborates on allegations against Far in the criminal complaint. Far told the judge that payments to the providers of secret tips were made through his hedge fund’s prime brokers, which had also executed his trades.

Far also said that the person at Atheros who gave him inside information was a longtime friend.

“We were friends for a long time,” Far told the judge. “When you’re talking as friends, the guards are down. You’re not necessarily thinking, ‘I give you this, you give me that.’ But he did tell me that the company was going to fall short of its targets and there was going to be -- they were going into negative P&Ls.”

Far worked from 1999 to 2007 as an analyst and portfolio manager at New York-based Galleon. Rajaratnam is the most prominent trader charged in ongoing probes by the Justice Department and U.S. Securities and Exchange Commission.

Galleon was an investor in Spherix, which closed in March after gaining 10 percent in 2009, according to a person familiar with the firm, who asked not to be named because the information is private.

Lee, 53, worked at Steven Cohen’s SAC Capital Advisors LLC from 1999 to 2004.

The case is U.S. v. Far, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net; Linda Sandler in New York at lsandler@bloomberg.net.

Last Updated: November 11, 2009 00:01 EST