Insider trading trial: Jury hears more tapes

New York, Mar 22: Jurors at the insider trading trial of Raj Rajaratnam have listened to more wiretaps that prosecutors say show disgraced former Intel executive Rajiv Goel provided secret information about pending technology industry deals to Sri Lanka-born billionaire.

The prosecution yesterday played a secretly recorded phone conversation between Goel and Rajaratnam, who is the main accused in the biggest insider trading case to hit US courts in decades.

In a Mar 19, 2008 call, Goel told Galleon Group founder, Rajaratnam, that Intel was planning to make a USD 1 billion investment in a new joint venture with Clearwire and others to develop an ultra-fast wireless Internet service, The New York Times reported.

Rajaratnam allegedly purchased through a Galleon technology fund 125,800 shares of Clearwire on Mar 24, 2008, based on inside information provided by Goel about the venture, according to the Wall Street Journal.

"Intel has a board meeting, in fact, today," Goel can be heard telling Rajaratnam.

Goel has already pleaded guilty to giving Rajaratnam insider tips. The main question of this case is whether Rajaratnam, 53, made 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.

Out of the 26 people arrested in this case, 19 have pleaded guilty. Rajaratnam, however, denies any wrongdoing but could face up to 20 years in prison, if found guilty.

A government witness, Sriram Viswanathan, a senior Intel executive, told the jury that Goel had access to confidential information regarding a deal -- nicknamed Project Rain  that Intel was having about creating a new 4G wireless network.

The information included details like how much money Intel might invest, which Goel shared with Rajaratnam, NYT reported.

Earlier in the day, Margaret Holloway, a senior credit analyst for Moody's Investors Service, testified that she gave confidential information about Hilton''s planned sale to Blackstone Group LP to a junior analyst, Deep Shah, WSJ reported.

Shah is believed to be in India. Rajaratnam allegedly got the information from a woman called Roomy Khan, who got it from the Moody analyst, and then he bought up shares in the hotel chain before the 2007 buyout.

Rajaratnam's lawyers argued that information about the deal was already in the public domain.

PTI

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Insider trading trial: Rajaratnam got red hot info

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
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