Witness: Insider trading crimes destroyed my life

Print
Email
|

Associated Press

Posted on August 9, 2012 at 10:00 PM

Updated Friday, Aug 10 at 3:00 AM

NEW YORK (AP) — A key government witness in the insider trading trial of a San Francisco hedge fund operator testified Thursday that her crimes destroyed her life, ruining her reputation and her finances.

Roomy Khan, 53, was pushed by lawyers on both sides to sum up her gloomy existence over the last decade as her testimony over four days neared its end in the trial of Doug Whitman, founder of Whitman Capital.

"Sir, my life has been destroyed, the way I knew it," Khan said in response to questions from Whitman's San Francisco defense lawyer, David L. Anderson. A day earlier, she had cried as she told a prosecutor about her life's difficulties.

On Thursday, she cited damage from "a public lynching and money lost," saying her pain was beyond comprehension. Once worth up to $40 million, she described struggling to pay the mortgage on her $5 million Atherton, Calif., home before moving to Fort Lauderdale, Fla.

Khan was testifying for the first time this week at a trial despite cooperating with the government for much of the last dozen years. She admitted earlier in the week that she supplied inside tips to one-time billionaire Raj Rajaratnam 15 years ago. Rajaratnam is serving 11 years in prison after his conviction in history's biggest insider trading prosecution. The probe produced more than two dozen convictions.

She told the jury that she fed inside information to Whitman, one of several friends she claimed to call whenever she got reliable tips about upcoming earnings announcements. She said he refused to listen to secrets about mergers and acquisitions.

"No, unless you want to share a jail cell, you don't want to be involved in something like that," she said he warned her. He has pleaded not guilty.

Anderson tried to damage Khan's credibility, reading statements she made when she pleaded guilty in 2001 to wire fraud charges in an earlier cooperation deal with the government. She had said then that she could not comprehend how she could engage in such reckless acts and that she would always regret her behavior.

Yet, she had testified that she resumed cooperating in 2007 after initially lying to the FBI about feeding inside information to several friends between 2004 and 2007. She said she lived a five-minute walk from Whitman's home.

"You returned to committing crimes?" Anderson asked.

"Yes," she answered.

"Now you want the jury to believe you turned over a new leaf?" Anderson asked.

"Objection!" interrupted Assistant U.S. Attorney Christopher LaVigne.

"Sustained," Judge Jed Rakoff said.

"No further questions," Anderson said, his question left only for the jury to answer.

___

Follow Larry Neumeister at http://twitter.com/Lneumeister

Print
Email
|