Former Intel Executive Testifies Sharing Company Secrets with Hedge Fund Founder Rajaratnam

As the Wall Street insider trading trial continues, a second friend turned government witness has come forward to tell the jury the truth. On Tuesday, as per a report in Yahoo! News, Intel (News - Alert) executive Rajiv Goel told the jury in Manhattan Federal Court that he shared company secrets with his friend, hedge fund founder Raj Rajaratnam, the central figure in the Wall Street insider trading trial.

According to the Yahoo! News report, Goel told the jury that he tipped off the Galleon Group founder because they were close friends and "Mr. Rajaratnam helped me financially a few times."

In this case, the prosecutors have accused Sri Lankan-born Rajaratnam, 53, of illegally making $45 million based on tips from corporate insiders. Media reports indicate that

Rajaratnam is the most prominent defendant in the largest U.S. hedge fund insider trading case in history.

However, the one-time billionaire has denied wrongdoing, and said his trades were based on his own research and publicly available information. He faces up to 20 years in prison if convicted of securities fraud, writes Yahoo! News reporters Jonathan Stempel and Grant McCool.

Also, the report said that 26 people have been charged in this probe, and 19, including Goel, have pleaded guilty. Goel has yet to be sentenced.

Another friend of Rajaratnam and government witness is Anil Kumar, a former McKinsey & Co. executive, who also admitted to passing on client secrets to Rajaratnam.

In fact, India-born Goel will be testifying for two to three days, during which he will be cross-examined by one of Rajaratnam's defense lawyers. The Yahoo! News article goes on to say that Goel tipped Rajaratnam about a big wireless network transaction involving Clearwire.

During the trial on Tuesday, a current Intel executive testified that confidential details about Clearwire (News - Alert) were leaked before the announcement of the deal.

Hence, based on inside information, Rajaratnam bought 125,800 Clearwire shares, prosecutors argued. This purchase came two days before news reports of a possible 4G WiMax venture between Clearwire and Sprint Nextel (News - Alert) Corp. involving $1 billion of capital from Intel, the prosecutors added. As per the Yahoo! News report, the venture was announced on May 7, 2008.