After the Galleon scandal, Raj Rajaratnam has wound up his Galleon group when he was apprehended on charges of insider-trading of hedge funds. A Report in Wall Street Journal has disclosed that Roomy Khan, a former employee of Galleon in 1990, contacted Rajaratnam in 2005 to request him for her re-employment in the Galleon group. Rajaratnam asked her any inside information about the companies and she told that she could provide inside information of Polycom. On the inside tip given by Roomy Khan, Galleon made huge buying of Polycom, Hilton and Google.
It has been revealed that Roomy Khan gave him the inside tips to regain her job in the Galleon group. She is now “cooperating witness” in the legal proceedings. Despite the fact she fulfilled all her promises which she made to Rajaratnam, she never got re-employment. She disclosed insider information about Polycom that the company was going to make greater profits in the fourth quarter. Using the tip, Galleon made $735,000 from Polycom. She paid $10,000 to an analyst for an inside information regarding take-over of Hilton Hotels and she made $630,000 profit.
She shared the same tip with Rajaratnam and Galleon made four million dollars profit. Similarly, she got insider information from Market Street Partners that Google’s 2nd quarter earnings will decrease. She gave the tip to Rajaratnam and helped Galleon make profit of nine million dollars. She began to help SEC when Hilton stocks took a boom. She consented to get her discussion regarding “insider information” phone -taped which led to his arrest.
Roomy Khan
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