New York: Prosecutors in the US' biggest insider trading case have released tapes of conversations between main suspect Raj Rajaratnam and four of his alleged co-conspirators, including two of Indian origin, in which he was allegedly receiving or directing stock tips.
The secretly recorded telephone calls of 53-year-old Sri Lanka-born billionaire Rajaratnam, the Galleon Group founder, with Anil Kumar, a former director at McKinsey; Rajiv Goel, an ex-Intel executive; and Adam Smith and Ian Horowitz who worked for his Hedge Fund; had been played by the prosecutors.
"Hey Raj... so yesterday, they agreed on ... at least they've shaken hands on and said they're going ahead with the deal," Kumar told Rajaratnam, his ex-Wharton classmate, according to the tapes available on the website of american media outlets. "So I think you can now just buy."
Kumar testified in court on Thursday that in 2003 Rajaratnam had asked him to work as his consultant, and transferred $ 500,000 a year into a Swiss bank account in exchange for confidential information about McKinsey every four to six weeks.
"Mr Rajaratnam kept asking me for that information and I felt that I owed him something given how much money he was paying me," Kumar told the jury on the third day of the trial.
Kumar, 52, has already pleaded guilty to providing secret information to Rajaratnam from 2003 to 2009, including a tip off on the acquisition of ATI Technologies Inc. by Advanced Micro Devices Inc.
Rajaratnam, who is charged with 14 counts of security fraud and conspiracy, could face up to 20 years in prison. While he denies any wrongdoing, 19 people have pleaded guilty in the case, including Goel and Smith.
Another Indian-American Rajat Gupta, a former board member of Goldman Sachs and Proctor & Gamble, was charged last week by the Securities and Exchange Commission for sharing confidential information with Rajaratnam.
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 for five years.
On Wednesday, Dowd said that Kumar was now trying to pin his client and "get a free pass from the government." Dowd also told the jury that those witnesses who have pleaded guilty but not been sentenced are on a "leash" held by
the prosecutors. He said that all the information used by Rajaratnam was already in the public domain, and his client excelled in research.
The central question of the case is whether Rajaratnam earned $ 45 million by using leaked confidential information. However, Rajaratnam says his strategies were based on "public information".
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