Former Consultant, Roomy Khan, Sentenced In Manhattan Federal Court To One Year In Prison For Insider Trading And Obstruction Of Justice
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROOMY KHAN was sentenced today to one year in prison for her participation in insider trading schemes in which KHAN provided material, nonpublic information (“Inside Information”) about various publicly-traded companies to a number of individuals, including Raj Rajaratnam, the founder and former head of the Galleon Group, and Doug Whitman, the president and founder of Whitman Capital. KHAN pled guilty in October 2009 to securities fraud, conspiracy to commit securities fraud, and obstruction of justice pursuant to a cooperation agreement with the Government. She was sentenced in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the Information, statements made during KHAN’s guilty plea proceeding, KHAN’s testimony during the criminal trial of Doug Whitman, and the Government’s sentencing submission in KHAN’s case:
From approximately 2004 through 2007, KHAN provided Rajaratnam, Whitman, and others with Inside Information relating to several companies, including Polycom and Google, with the understanding that these individuals would use the information to trade securities. KHAN also used some of the Inside Information to make personal trades. In exchange for the information she provided to her co-conspirators, KHAN received Inside Information about numerous other companies. In addition, KHAN obstructed the Government’s investigation of her co-conspirators by, among other things, deleting an incriminating email she received from a co-conspirator and alerting others to a pending investigation by the U.S. Securities and Exchange Commission.
In addition to the prison term, Judge Rakoff sentenced KHAN, 54, to three years of supervised release. KHAN was also ordered to pay $1,525,000 in forfeiture and a $300 special assessment fee.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Christopher L. LaVigne and Jillian Berman are in charge of the prosecution.