Wednesday, 28 January 2015
Last updated 26 min ago
Feb 3 2011 | 2:03pm ET
Information about two former McKinsey & Co. partners is "critical" to Raj Rajaratnam's defense, his lead lawyer said.
John Dowd told U.S. District Judge Richard Holwell that the Galleon Group founder needs the information about Anil Kumar and a second, unidentified former partner from McKinsey. The consulting giant is fighting the subpoena.
Kumar, a former senior director at McKinsey, is one of 19 people to plead guilty in the massive insider-trading case. The second alleged tipster is likely Rajat Gupta, who was identified by name in McKinsey's filing. Gupta, the former head of McKinsey, is not accused of any wrongdoing, but court papers indicate that prosecutors believe he passed confidential information about Berkshire Hathaway's 2008 investment in Goldman Sachs to Rajaratnam. The two men are long-time friends and business partners, and Gupta served on Goldman Sachs' board of directors at the time.
McKinsey said that the latest subpoena seeks "troves of irrelevant, unspecific and inadmissible documents." Not so, according to Dowd.
The documents he's seeking are "relevant in light of the government's contention that the individual served as a 'tipper,' providing inside information to Mr. Rajaratnam about a number of stocks while employed at McKinsey."
"The case is what it is, and it has McKinsey written all over it," Dowd added. Rajaratnam is accused of illegally trading "in the securities of eight different McKinsey clients."
Furthermore, Dowd wrote, Kumar and the unidentified second partner ran a separate consulting business from their offices at McKinsey, working "closely with Mr. Rajaratnam in connection with legitimate business ventures between 2006 and 2009."
Rajaratnam is set to face trial on Feb. 28. The shape of that trial is beginning to come into focus; Holwell yesterday ordered Galleon to turn over information about Rajaratnam's compensation over Dowd's objections, and gave prosecutors the green light to seek information about trading in 16 stocks, three unnamed Galleon employees and further e-mails.
In addition, Dowd offered several questions he'd like to put to potential jurors during jury selection, focused on the honesty, integrity and greed of "today's Wall Street executives." One reads, "Do you feel it more likely than not that, if accused of impropriety, a Wall Street executive is probably guilty?"
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…