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

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.