Thursday, 31 July 2014
Last updated 41 min ago
Mar 16 2011 | 2:18pm ET
If Raj Rajaratnam's lead lawyer counted on breaking the government's first star witness in his insider-trading trial, John Dowd walked away from the confrontation disappointed.
Anil Kumar, the former Rajaratnam friend and McKinsey & Co. director who claims to have provided confidential information to Rajaratnam, held up well against John Dowd's aggressive attacks.
At one point laughing during his cross-examination, Kumar brushed off Dowd's accusation that his lies were "monstrous" by responding, "I'm not sure what you mean by monstrous. I obeyed the managing partner of Galleon, Mr. Raj Rajaratnam's, instructions."
Dowd focused on the payments Rajaratnam made to Kumar, allegedly for the inside information and which Kumar attributed to his housekeeper to hide the illicit activity.
"In fact, they were fraudulent," Dowd insisted. "Is that a question?" Kumar responded.
Kumar also denied that he was lying to "save" his "own skin," when Dowd asked, "It's important that you testify in this court to make Mr. Streeter," the lead prosecutor, "happy, correct?"
"Wrong," Kumar shot back.
"You made up a story to please the government, to put the blame on Raj," Dowd accused. "That it's all a lie, a monstrous lie. Isn't that a fact, sir?"
"I hope that this court will decide who's lying and who is not, sir," Kumar retorted.
Earlier in the day, Kumar finished his three days of direct examination by Streeter, telling the jury that he suspected another alleged tipster was cooperating with the government and that he feared they were closing in. Kumar also testified that Rajaratnam instructed him to "use pre-paid cell phones" when he called him.
Kumar said the two discussed the matter in Miami Beach, Fla., just days before their arrests in 2009. He said Rajaratnam turned to him while they were sitting on the beach and said, "You know, Anil, I'm told there's a gentleman who used to work for me and now he's wearing a wire." When Kumar asked who, Rajaratnam named Ali Far, a cooperating witness in the case.
Far is also the co-founder of hedge fund Spherix Capital. The other co-founder, former SAC Capital Advisers manager Richard Choo-Beng Lee, is also cooperated and has also pleaded guilty.
But even while they talked about Far's alleged betrayal, Rajaratnam continued to trade in confidential information, Kumar said. At one point during their beachfront talk, Rajaratnam walked away to take a phone call. When he returned, he allegedly told Kumar, "I just got a call. Cisco is buying a company called Starent" Networks Corp.
Jurors also heard, for the first time, the voice of former McKinsey & Co. chief Rajat Gupta, accused of passing Rajaratnam tips about Goldman Sachs and Procter & Gamble, two companies on whose board he said. Gupta, who has denied wrongdoing, had said that the government did not have any incriminating wiretaps of his conversations with the Galleon founder.
On the tape played yesterday, Gupta is heard telling Rajaratnam about things discussed at a Goldman board meeting, including the purchase of a retail bank, possibly Wachovia Corp., and troubled insurance giant AIG.
"There was a big discussion at the board meeting," Gupta says on the July 29, 2008, call. "It was a, uh, divided discussion" with most of the board opposed to going into commercial banking. Goldman never did so.
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