New York, Mar 15: Raj Rajaratnam, prime accused in the insider trading trial, got "red hot" information on a "super-confidential" business deal in the high profile case that has also brought to fore "intimate relationship" and a mysterious "India Book".
The 53-year-old Sri Lankan billionaire also warned another wayward manager not to reveal inside securities secrets with her "little boyfriends," according to testimony and wiretaps presented yesterday during the hearing in the biggest insider trading case in decades.
Former McKinsey director Anil Kumar, an Indian-American, told a jury on Monday that he provided confidential information to Rajaratnam, founder of Galleon Group, on a "super-confidential" deal in 2006 involving the acquisition of ATI Technologies Inc by Advanced Micro Devices Inc (AMD).
"I told him that this was red hot," Kumar said. "Please do keep this to yourself... Don''t let anyone know."
The central question of the insider trading case is whether Rajaratnam earned USD 45 million by using leaked confidential information.
His lawyers say that Rajaratnam conducted his business based on information that was already in the public domain and through research. Prosecutors allege Rajaratnam made USD 20 million in illegal profits from the ATI tip-off.
Kumar, who has already pleaded guilty said, that he received a USD 1 million "bonus" for the information he gave on the AMD-ATI deal.
Kumar, 52, said that his ex-Wharton school classmate told him, "I just wanted to thank you... You''re a star... You''re a hero."
"I almost fell off my chair," he added, recalling the call he got from Rajaratnam offering him the money.
On the second day of Kumar's testimony, the prosecutors played several phone recordings of conversations between him and Rajaratnam including one on Aug 15, 2008, in which Kumar said that parties had a "shake hand" on the deal.
After speaking with Kumar, the Sri Lankan billionaire called Danielle Chiesi, a hedge fund trader, who has already pleaded guilty ."AMD will not go bankrupt," he told her.
"We have to keep radio silence on this. OK?" Rajaratnam tells Chiesi on one call, and Chiesi responds, "Oh, Please. That is my pleasure." Rajaratnam says, "not even to your little boyfriends you know?"
A month later when Kumar told Rajaratnam that the deal was going through, the latter again called Chiesi and told her the date was set for October 7.
"I''m a warrior... They can't kill me... Oct's my month," Rajaratnam said. In the conversation, Chiesi feared that she would be investigated.
Kumar said that Rajaratnam had earlier told him that his "value was diminished" because Chiesi was also getting information from the head of AMD, Hector Ruiz, with whom she had an "intimate relationship". Ruiz has not been accused of any wrongdoing but his spokesman said any "suggestion that the relationship was intimate is untrue."
Chiesi also reportedly had an affair with former IBM executive Bob Moffat, who has also pleaded guilty.
Kumar said Rajaratnam kept a book of trades that he called the "India Book," but Kumar said he believed it was "fake" or "funny money."
John Dowd, Rajaratanam's lawyer, has asserted that Kumar had hidden from McKinsey the money he received from Rajaratnam for above-board consultations and that Kumar was guilty of tax evasion from the IRS for five years.
So far, 19 people have pleaded guilty, but Rajaratnam, who has been charged with 14 counts of conspiracy and security fraud, denies any wrongdoing. Another Indian-American, Rajat Gupta, a former board member of Goldman Sachs and Proctor
PTI
View the original article here
The 53-year-old Sri Lankan billionaire also warned another wayward manager not to reveal inside securities secrets with her "little boyfriends," according to testimony and wiretaps presented yesterday during the hearing in the biggest insider trading case in decades.
Former McKinsey director Anil Kumar, an Indian-American, told a jury on Monday that he provided confidential information to Rajaratnam, founder of Galleon Group, on a "super-confidential" deal in 2006 involving the acquisition of ATI Technologies Inc by Advanced Micro Devices Inc (AMD).
"I told him that this was red hot," Kumar said. "Please do keep this to yourself... Don''t let anyone know."
The central question of the insider trading case is whether Rajaratnam earned USD 45 million by using leaked confidential information.
His lawyers say that Rajaratnam conducted his business based on information that was already in the public domain and through research. Prosecutors allege Rajaratnam made USD 20 million in illegal profits from the ATI tip-off.
Kumar, who has already pleaded guilty said, that he received a USD 1 million "bonus" for the information he gave on the AMD-ATI deal.
Kumar, 52, said that his ex-Wharton school classmate told him, "I just wanted to thank you... You''re a star... You''re a hero."
"I almost fell off my chair," he added, recalling the call he got from Rajaratnam offering him the money.
On the second day of Kumar's testimony, the prosecutors played several phone recordings of conversations between him and Rajaratnam including one on Aug 15, 2008, in which Kumar said that parties had a "shake hand" on the deal.
After speaking with Kumar, the Sri Lankan billionaire called Danielle Chiesi, a hedge fund trader, who has already pleaded guilty ."AMD will not go bankrupt," he told her.
"We have to keep radio silence on this. OK?" Rajaratnam tells Chiesi on one call, and Chiesi responds, "Oh, Please. That is my pleasure." Rajaratnam says, "not even to your little boyfriends you know?"
A month later when Kumar told Rajaratnam that the deal was going through, the latter again called Chiesi and told her the date was set for October 7.
"I''m a warrior... They can't kill me... Oct's my month," Rajaratnam said. In the conversation, Chiesi feared that she would be investigated.
Kumar said that Rajaratnam had earlier told him that his "value was diminished" because Chiesi was also getting information from the head of AMD, Hector Ruiz, with whom she had an "intimate relationship". Ruiz has not been accused of any wrongdoing but his spokesman said any "suggestion that the relationship was intimate is untrue."
Chiesi also reportedly had an affair with former IBM executive Bob Moffat, who has also pleaded guilty.
Kumar said Rajaratnam kept a book of trades that he called the "India Book," but Kumar said he believed it was "fake" or "funny money."
John Dowd, Rajaratanam's lawyer, has asserted that Kumar had hidden from McKinsey the money he received from Rajaratnam for above-board consultations and that Kumar was guilty of tax evasion from the IRS for five years.
So far, 19 people have pleaded guilty, but Rajaratnam, who has been charged with 14 counts of conspiracy and security fraud, denies any wrongdoing. Another Indian-American, Rajat Gupta, a former board member of Goldman Sachs and Proctor
PTI
View the original article here
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