Rajiv Goel, a former Indian American Intel executive, has said that he passed secret tips to his “friend” Raj Rajaratnam, the main accused in the largest insider trading case to hit US courts in decades.

Testifying in the case in a court here on Tuesday, Mr Goel said: “Rajaratnam and I were very good friends.”

He said that he began to pass on the company information to Mr Rajaratnam, Galleon Group founder, from 2005.

“He was a good man to me,” he told the jury.

“I was a good pal...so I gave him the information.”

Mr Goel is the second key witness after Mr Anil Kumar, a former McKinsey director, who has finished testifying on behalf of the government. Both men have pleaded guilty.

The 53-year-old Sri Lankan-born billionaire allegedly paid Mr Goel six figure amount for the information.

In 2005, Mr Goel said he received $100,000 to buy a house and then a year later $500,000 for a family matter. The former Intel executive also said that he earned more than $700,000 after Mr Rajaratnam took control of his brokerage account.

On Monday, the prosecution played a secretly recorded phone conversation on March 19, 2008 in which Mr Goel told Mr Rajaratnam that Intel was planning to make a $1-billion investment in a new joint venture with Clearwire.

Mr Rajaratnam allegedly purchased 125,800 shares of Clearwire on March 24, 2008, based on inside information. He is accused of making more than $45 million by illegally trading on insider information.

His lawyers say that Mr Rajaratnam conducted his business based on information that was already in the public domain and through research.

Out of the 26 people arrested in this case, 19 have pleaded guilty. Mr Rajaratnam, however, denies any wrongdoing.

He was arrested in October 2009, and has been freed on bail of $100 million. If found guilty, he could face up to 20 years in prison.

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