New York: Intel Corp's India-born former MD Rajiv Goel, who was charged with giving inside corporate information to Raj Rajaratnam, has been spared jail time as he turned government witness and helped nail the Galleon founder in America's biggest insider trading scandal.
Goel, 54, apologised and said he was "deeply ashamed" before he was sentenced by US District Judge Barbara Jones in federal court in New York on Monday. The judge sentenced him to two years' probation and fined the California resident $10,000 and also ordered him to forfeit $266,000. Jones said Goel "showed good sense in deciding to cooperate" with the government.
Goel is the second Indian-American, charged with insider trading, to have escaped jail time after becoming a key government witness against Rajaratnam.
The other government witness India-born former McKinsey executive Anil Kumar was also spared jail time and was sentenced in July to only two years' probation for his cooperation in Rajaratnam's and his mentor at Mckinsey Rajat Gupta's trial.
Goel was arrested with Rajaratnam in October 2009 and had pleaded guilty in 2010 to conspiracy and securities fraud. He had agreed to cooperate with the government and provided "substantial assistance" as a witness against Rajaratnam in his trial in 2011.
Goel had faced up to 25 years in prison. At the hearing he said, "I had a serious lapse of judgement and good sense". Mumbai-born Goel had met Rajaratnam in 1983 at the Wharton Business School.
He had served as managing director in Intel's treasury department and had provided confidential information to Rajaratnam about the company's earnings and a billion dollar transaction in 2008. Rajaratnam made over two million dollars in illegal profits based on the tips.
Goel had told prosecutors he repeatedly sought financial assistance from Rajaratnam, who loaned him $100,000 to buy a home in 2005 and another $500,000 the next year for his ailing father.
The Wharton Business School graduate was among the scores of Wall Street executives nailed by US Attorney in Manhattan Preet Bharara's team in the widespread crackdown on insider trading.
Other prominent India-born executives were also charged by Bharara in the large scale insider trading ring that was managed by Rajaratnam.
Among them, Gupta is the most high profile Indian-American to be convicted on insider trading charges and will be sentenced on October 17.
Federal prosecutors had recommended to the Manhattan Court that Goel be shown leniency at his sentencing since he had provided "substantial assistance" as a key government witness in Rajaratnam's insider trading trial that helped convict the hedge fund founder.
Bharara had said in a letter to Jones that Goel was a "highly significant witness" who helped the government secure a conviction in one of the most significant and high-profile insider trading trials in history.
Goel's lawyer David Zornow also wrote a letter to Jones saying his client should be spared prison term and sentenced only to probation as Goel does not have any previous criminal history and "had lived a life free of crime until he started providing Rajaratnam with inside information".
Zornow called Rajaratnam a "master manipulator" and a "corrupter of friends" who was larger than life to Goel, who came to the United States from India in the early 1980s to go to school.
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