Roomy Khan, once known as “Tipper A,” spoke to students Wednesday night about what she has learned from her involvement in the FBI investigation, “Operation Perfect Hedge.”
According to Khan, “Operation Perfect Hedge” has been one of the largest insider trading investigations with about 90 arrests and prosecutions.
As a tipper, Roomy Khan would get “the edge” or the secret insider information about a company, and she would give this information to her superior, Raj Rajaratnam, who owned his own hedge fund company, the Galleon Group.
However, looking back to where she started 30 years ago, Khan never thought she would go this far.
“I would’ve never thought in my life...that somebody would’ve said I’ll end up here, talking in front of people, talking about ethics and about the choices I made. I would’ve said you’re joking,” Khan said.
Her involvement began in 1995 when she met Raj Rajaratnam while working at Intel. Khan wanted to get into the hedge fund industry, and she saw Rajaratnam as her way to get the career she wanted, so she started to give insider information about Intel to him.
“I had access to Intel’s booking information and I was looking at my job and I wanted to break into the hedge fund industry. Raj was a big hedge fund manager and I wanted the job so I didn’t stop and think, ‘You know what?...I shouldn’t do it,’” Khan said.
In 1998, the FBI came to her door. After showing evidence of the information that Khan was sending Rajaratnam, Khan agreed to cooperate with the FBI against him. However, the case was sealed and Khan only had to pay a $250,000 fine and spend six months to one year on house arrest to settle her wire fraud charge.
Because all Khan had to do was pay a fine and do house arrest for some time, she did not think it was that big of a deal.
“I pretended it didn’t even happen, and I paid my fines and moved on with my life,” Khan said.
When Khan returned to work with Rajaratnam in 2005, she knew that she was getting herself in a bad situation, and she said it was like a former drug addict going back to his or her old environment after coming out of rehab.
“If you hear about the drug cases, you know people go for rehab, and then after rehab, if you go back to the same set of people, guess what? Before you know it, you’re back at it. So, I’m back at the same thing. I’m working with the same people,” Khan said.
In 2007, the FBI showed up at Khan’s house again, and Khan knew she was in trouble.
“And, you know to be honest, when they came to me the second time, I almost felt a deja vu...I was pretty certain that they wouldn’t do anything again. I thought that it was over,” Khan said.
When the FBI asked her to cooperate with them again she agreed, and she began working as an informant where she would record all of her conversations.
In 2013, she spent one year in federal prison in Coleman, Florida for wire fraud and insider trading.
Today, Khan hopes that by sharing her story, people will learn about the severity of the choices they make in the industry because she regrets her own.
“It actually took a lot for her to come in. Like backstage, she was still upset about the whole situation emotionally,” Ashley Nickey, the president of the Fraud Examiners Association and a senior criminal justice major, said.
The event was sponsored by the GS student chapter of the Finance Association and the Fraud Examiners club.