New York (HedgeCo.Net) – Roomy Khan, a government co-operator in the biggest hedge fund insider trading conspiracy in US history, spoke yesterday at the trial of San Francisco hedge fund manager Doug Whitman who stands accused of making almost $1 million using insider tips from Khan and other conspirators.

Khan has pleaded guilty to passing inside information to Galleon Group fund manager Raj Rajaratnam, who is currently serving an 11-year prison sentence. The insider-trading case against Galleon Group co-founder Raj Rajaratnam was sparked by information from Khan.

NYT reports: In a pretrial hearing, Mr. Whitman’s lawyers said Ms. Khan cooperated with the government for months before she finally pointed the finger at Mr. Whitman. “That sequence of events we submit goes directly to the credibility of what Khan is saying,” said David Anderson, Mr. Whitman’s lead defense attorney in the hearing. “Ms. Khan is still out there trying to hustle up her cooperation credit,” he said.

Reuters said: Whitman is charged with securities fraud and conspiracy in making $900,000 illegally on inside information, the latest strand of the high-profile Galleon hedge fund prosecutions against dozens of money managers and traders over the past three years. So far, all have pleaded guilty or were convicted at trial.

The charges carry a combined possible maximum prison term of 25 years. Whitman’s trial before U.S. District Judge Jed Rakoff began on July 31 and is expected to last three weeks.

Doug Whitman has pleaded not guilty. His lawyer told the jury that Whitman “did not pay or corrupt anyone for inside information.”

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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