Last night, 60 Minutes ran an excellent piece called "Inside Edge" about former stock analyst Roomy Khan. Khan was caught early by federal prosecutors investigating insider trading by hedge funds, and ultimately became a critical government informant in the criminal case that brought down Galleon Group's Raj Rajaratnam and dozens of others.
In Inside Edge, 60 Minute's Bill Whitaker interviewed Khan about how she came to the U.S. as a student from Delhi, India. She rose to become worth $50 million before the insider trading scandal that ultimately led her to downfall. Khan is now unemployed and living in Florida following her recent release from prison.
Khan had connections at firms including Google and Polycom that provided her with nonpublic information about earnings and other material developments. She used this information, she says, to make $1.5 million in insider trading. Prosecutors said that Khan's friends and associates -- including Rajaratnam -- made an additional $25 million off her tips.
Khan worked at Intel as a product marketer, where she also had access to nonpublic company information. Rajaratnam obtained inside information about Intel from Khan, as well, that he was able to trade on. Indeed, Khan said, she was such a good inside source that Rajaratnam offered her money just to stay employed at Intel so she could keep giving him information.
The 60 Minutes piece includes interviews with SEC attorney Andrew Michaelson and FBI agent B.J. Kang. Michaelson and Kang worked on the SEC and FBI investigations into hedge funds. After Kang showed Khan incriminating text messages between her and Rajaratnam, Khan agreed to become a government cooperator and to secretly record phone conversations with her colleagues. According to AUSA Jonathan Streeter, who was trial counsel on the case, Khan's cooperation provided enough evidence that the government was able to persuade a federal court to allow it to tap Rajaratnam's cell phone -- which provided the most critical evidence of all.
Check out the full 60 Minutes video here.