Bloomberg News

Rajaratnam Judge Asks to Review Sentencing Report on Jiau

September 26, 2011

(Updates with court filing excerpt in fourth paragraph.)

Sept. 26 (Bloomberg) -- The U.S. judge who is to sentence Galleon Group LLC co-founder Raj Rajaratnam for insider trading on Oct. 13 asked to see the sentencing report for Winifred Jiau, a former consultant for Primary Global Research LLC.

Jiau was sentenced to four years in prison last week for her role in an insider-trading ring. She was convicted in June of one count each of conspiracy and securities fraud for passing earnings and other information about Nvidia Corp. and Marvell Technology Group Ltd. to two hedge fund managers.

Rajaratnam, 54, was convicted in May of 14 criminal counts of conspiracy and securities fraud for directing what prosecutors said was the largest hedge-fund insider trading ring. The U.S. has said Rajaratnam should be sentenced to a term of 19 1/2 to 24 1/2 years, a penalty the defense has called “grotesquely severe.”

The request by U.S. District Judge Richard Holwell in Manhattan, who presided over Rajaratnam’s trial, was granted Sept. 23 by U.S. District Judge Jed Rakoff, who sentenced Jiau, according to a court filing today.

Review

“Judge Holwell would like to review that presentence report in preparation for the upcoming sentencing of the defendant Raj Rajaratnam,” Thomas McCarthy, a senior U.S. Probation Officer, wrote in the request to Rakoff.

The U.S. said Rajaratnam made $63.8 million, using illegal tips to trade in the stocks of companies including Goldman Sachs Group Inc., Intel Corp., Google Inc., ATI Technologies Inc. and Clearwire Corp.

Jiau collected at least $208,000 for her insider’s tips, prosecutors said. Noah Freeman, a former SAC Capital Advisors LP portfolio manager, testified at her trial that he made $5 million to $10 million based on Jiau’s tips.

The U.S. sought a prison term of eight to 10 years for Jiau, arguing she had failed to show any remorse or perform any charitable works.

On the same day Jiau was sentenced, Zvi Goffer, an ex- Galleon Group LLC trader convicted in a separate insider-trading scheme, was sentenced to 10 years in prison by U.S. District Judge Richard Sullivan.

Goffer, who co-founded Incremental Capital LLC after he was fired from Galleon in 2008, was convicted of all 14 criminal counts against him.

Fired by Rajaratnam

Evidence at the trial showed that Goffer was fired by Rajaratnam because he’d failed to provide accurate inside information.

Goffer’s brother, Emanuel, and Michael Kimelman were convicted at the same trial. Prosecutors said Zvi Goffer headed a ring that made more than $10 million trading in 3Com Corp., Axcan Pharma Inc., Kronos Inc. and Hilton Hotels Corp. based on information misappropriated by two lawyers.

The court docket doesn’t indicate that Holwell has made any request for Goffer’s sentencing memorandum.

Ellen Davis, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, declined to comment on today’s filing.

The case is U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Peter Blumberg, Andrew Dunn

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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