Prosecutors: Witnesses Offer Evidence Of Rajaratnam's Insider Trading

Feb 8 2011 | 12:41pm ET

The noose around Raj Rajaratnam appeared to tighten further this week as prosecutors revealed some of the evidence they plan to use against the Galleon Group founder.

At least three cooperating witnesses have provided evidence of insider-trading by Rajaratnam, assistant U.S. Attorney Jonathan Streeter wrote in court documents. Two of those three are former Galleon employees.

One, Michael Cardillo, pleaded guilty to insider-trading charges last month as part of a plea deal. Streeter said that he approached prosecutors in October to discuss cooperating.

"Members of the trial team met with Cardillo and debriefed him about evidence he had against Rajaratnam," Streeter wrote. "This included Rajaratnam's trading based on inside information relating to Proctor & Gamble, as well as Cardillo had against another co-conspirator not previously identified by the government to the defendant."

Streeter made the filing in response to a bid by Rajaratnam's lawyers seeking to exclude discussion of four stocks from the trial, including Procter & Gamble. The trial is set to begin on Feb. 28.

According to another cooperating witness, former McKinsey & Co. consultant Anil Kumar, Rajaratnam went to jail just days after another deal about which he had advanced knowledge. While it is unclear whether Rajaratnam traded or sought to trade on that information, about Cisco System's acquisition of Starent Networks, prosecutors said that Rajaratnam told Kumar that he knew about the deal.

Cisco announced its purchase on Oct. 13, 2009, three days before Rajaratnam's arrest.

Streeter said Kumar's claims "had very recently been corroborated through evidence supplied by Adam Smith," another former Galleon trader who is cooperating in the investigation.

Kumar himself made a filing this week, asking a judge to junk a subpoena from Rajaratnam's lawyers seeking documents from his McKinsey days. McKinsey has also objected to the subpoena.

Kumar called the request "excessively burdensome," and another, seeking his tax returns and personal trading records, "at most…an attempt to impeach Mr. Kumar's credibility."


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

As initial anxiety over Donald Trump’s victory gave way to market euphoria in the days following the election, there was a casualty. Gold prices.