Roomy Khan, Figure in Galleon Insider Case, Sentenced to One Year in Prison

Roomy Khan, a central figure in the insider-trading investigation that led to the conviction of the hedge fund manager Raj Rajaratnam, was sentenced to one year in prison on Thursday for illegally passing inside information and obstructing justice.

Despite the assistance that Ms. Khan had provided prosecutors in the case against Mr. Rajaratnam, her actions â€" in particular, lying to federal investigators â€" were serious enough to merit a prison term, said Judge Jed S. Rakoff of the Federal District Court in Manhattan.

“You cannot have it both ways,” Judge Rakoff said. “You cannot obstruct justice and then say, ‘Well, because I’ve done good things since, forget about it.’”

The punishment, Judge Rakoff added, sends a “very important message” about the consequences of hindering a government investigation.

Ms. Khan, 54, a one-time Intel executive who later worked at the Galleon Group, will not appeal the sentence, said her lawyer, Stanislao A. German. But he said e considered the punishment unduly severe.

“I understand the judge’s reasoning and logic,” Mr. German said. “But considering the individuals who went to trial got two years, I think one year for Ms. Khan is a lot.”

In a separate case not directly related, Jason Pflaum, a witness who gathered evidence about his former boss, the hedge fund manager Samir Barai, was sentenced to two years of probation.

Mr. Pflaum, who pleaded guilty in 2010 to securities fraud and conspiracy to commit securities fraud, had helped prosecutors secure a guilty plea from Mr. Barai on insider trading charges. He also helped with the conviction of Winifred Jiau, a former consultant for an expert network firm, prosecutors said.

The government’s sweeping investigation into insider trading has relied heavily on cooperating witnesses to build their cases. Investigators have pressed these people for information about their colleagues, and also have had many of them secretly record phone calls â€"! or wear wires â€" to obtain incriminating evidence. Virtually all of those who cooperated have received sentences of probation, which does not involve a prison term.

Ms. Khan, who had sought five years of probation, pleaded guilty in 2009 to conspiracy to commit securities fraud and securities fraud, a charge that carried a maximum prison sentence of 20 years. She also admitted to lying to agents at the Federal Bureau of Investigation.

Her lawyer had argued that she had been instrumental in the government’s investigation, particularly the prosecution of Mr. Rajaratnam, the former head of the Galleon Group who is serving an 11-year prison term for insider trading.

It was an instant message that Ms. Khan sent to Mr. Rajaratnam in 2006, indicating that they were swapping secret information about a technology company, first tipped off investigators that Mr. Rajaratnam was part of an insider trading conspiracy.

Preet Bharara, the United States attorney in Manhattan, had said Ms. Khanâ€s cooperation was “extremely substantial,” in a letter to Judge Rakoff before the sentencing. Prosecutors said the information Ms. Khan provided allowed the government to secure a wiretap of Mr. Rajaratnam’s cellphone.

Still, in addition to lying under oath, Ms. Khan destroyed evidence and tipped off co-conspirators about an investigation by the Securities and Exchange Commission, prosecutors said.

Ms. Khan cried as she read a statement to the court on Thursday, her voice shaking. She apologized to the court and to members of her family.

“I’ve lost all my money, and my education is rendered useless,” Ms. Khan said. “I have been ostracized by most of my family and friends, and I lead my life as a pariah in isolation.”

The judge said Ms. Khan seemed to have a “fairly fragile emotional structure,” adding that the “court has considerable sympathy for this defendant.”

The case was the second time Ms. Khan had been convicted of illegally passing informa! tion to M! r. Rajaratnam.

In a letter to Judge Rakoff, Ms. Khan described how she returned to illegal trading, saying she needed money and felt pressure to maintain appearances.

“Over time,” she wrote, “the shame and ignominy of losing my house and status in this society became more important than the unlawfulness of insider trading and the fear of getting caught.”