Roomy Khan Won’t Be Called as Witness in Rajaratnam Trial

Roomy Khan, the former Intel Corp. executive and stock trader who pleaded guilty to insider trading charges, won’t be called as a government witness in the trial of Galleon Group LLC co-founder Raj Rajaratnam, Assistant U.S. Attorney Reed Brodsky said.

Instead, prosecutors said today they want jurors to see Intel surveillance camera footage of Khan faxing confidential information to Rajaratnam. Two videotapes from late 1997 and early 1998 show Khan faxing Intel “book-to-billing” reports to Rajaratnam’s Galleon fax machine, according to a court filing. The government also has records showing “numerous calls” from Khan’s work phone to Rajaratnam’s, prosecutors said.

“The B&B reports provided a sense of Intel’s earnings, were used to analyze business trends and customer demand for Intel processors, and helped determine whether Intel was meeting internal earnings expectations,” prosecutors said in court papers filed today in federal court in Manhattan.

The government lawyers told U.S. District Judge Richard Holwell today that they want the jury to hear testimony from Mark West, an Intel employee who set up video surveillance of Khan’s work station and an office fax machine at the time.

Khan pleaded guilty more than eight years ago to leaking stock tips to Galleon and was sentenced to probation. In 2009, she pleaded guilty in the current investigation, the biggest crackdown targeting insider trading at hedge funds, and is cooperating with the government.

Lawyers for Rajaratnam tried to block West’s testimony, arguing that it will unfairly prejudice jurors and isn’t relevant to the charges he faces. Holwell heard arguments after the lunch break today. He hasn’t yet decided.

The case is U.S. v. Rajaratnam, 09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).

(Updates with prosecutors’ request to show surveillance footage to jury in second paragraph.)
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