Guilty Pleas in Rajaratnam Case Hit 20

Twenty out of 26 co-defendants linked to the Raj Rajaratnam insider trading trial have now pleaded guilty to conspiracy or securities fraud.

Late Thursday, attorney Jason Goldfarb told U.S. District Judge Richard Sullivan that he had made a “horrible mistake” by leaking information about a corporate acquisition to a securities trader in exchange for money.

“I can assure you, my life of crime is over,” Goldfarb told the judge before entering his guilty plea.

Goldfarb was arrested in 2009 as part of the insider trading scandal at the Galleon Group hedge fund whose founder, Rajaratnam, is the central figure in the largest insider trading case in U.S. history. The jury in Rajaratnam’s case is expected to begin deliberations Monday.

Goldfarb pleaded guilty to trading inside information in 2007 and 2008 about the future acquisitions of 3Com Corp., now part of Hewlett-Packard (NYSE:HPQ), and Axcan Pharma Inc.

Goldfarb, 32, said he passed information from his former college roommate, Arthur Cutillo, a former patent attorney at Ropes & Gray, and Brien Santarias to Zvi Goffer, who traded on it. Goffer is the founder of the trading firm Incremental Capital.

“With great regret, I made a horrible mistake and agreed to participate in this scheme,” Goldfarb said. He was scheduled to go on trial with five co-defendants next month.

Goldfarb and prosecutors have agreed on a sentencing recommendation of 37 to 46 months. However, the judge could impose a harsher punishment at the Aug. 19 sentencing hearing.

Cutillo and Santarias have both pleaded guilty to conspiracy and securities fraud.

Goffer, 35, has been often seen in the gallery at Rajaratnam’s criminal trial. He was sitting in the third row on April 12 when former Galleon President Richard Schutte testified about the firm’s research operation. During testimony, one of the courtroom monitors displayed emails written by Goffer’s former colleague Craig Drimal.

Goffer has pleaded not guilty to the charges against him.