Intel Executive, A Galleon Co-Defendant, Has Case Moved To NY

An Intel Corp. (INTC) executive accused of passing on sensitive information about the chip maker's activity to the head of embattled hedge fund Galleon Group agreed Monday to have his case moved to New York, where he will be prosecuted alongside the rest of the defendants.

During an appearance Monday in a San Jose federal court, Rajiv Goel, 51, an executive in the treasury department of Intel, waived holding hearings challenging the government's request to move the case. Goel also agreed to appear before a New York federal judge on Thursday.

Goel, who isn't in custody, had no comment after the brief hearing, and said he would make no comments until he has new legal representation in New York. He was represented Monday by a public defender.

The move comes as Galleon Group, the fund management company at the center of one of the biggest insider-trading cases in decades, begins the process of unwinding its roughly $3.7 billion portfolio. Since the insider-trading case broke, the firm has been deluged with redemption requests from investors, forcing it to sell off its holdings and possibly close its business.

A federal criminal complaint alleges that Goel passed on information regarding a 2008 recapitalization of wireless Internet carrier Clearwire Corp. (CLWR) by Intel and other companies to Galleon founder Raj Rajaratnam. Galleon made several large purchases of Clearwire shares before the re-financing of the company occurred, generating a quick profit for the hedge fund company, the complaint alleges.

Rajaratnam is also charged in the case. Rajaratnam, who has said he is innocent, is free on $100 million bail.

Other defendants in the case have also denied wrongdoing.

In a separate civil suit, the U.S. Securities and Exchange Commission alleges Goel, who graduated from the University of Pennsylvania's Wharton School in the same year as Rajaratnam, also passed on information about Intel's earnings. Trading based on corporate information that hasn't been disseminated to the public is illegal.

Goel, who has been placed on administrative leave by Intel, isn't the only executive alleged to have conspired with Rajaratnam. Others who have been charged include, Robert Moffat, 53, an executive at International Business Machines Corp. (IBM); Anil Kumar, 51, a director at management-consulting firm McKinsey & Co.; Mark Kurland, 60, of hedge fund group New Castle Partners LLC; and Danielle Chiesi, 43, a portfolio manager at New Castle.

-By Ben Charny, Dow Jones Newswires; 415-765-8230; [e-mail]