Ex-McKinsey Partner Testifies Against Rajaratnam Brother

Jun 27 2014 | 9:11am ET

Another veteran of Raj Rajaratnam’s insider-trading trial yesterday made a return trip to the witness stand at Manhattan federal court, to testify against the Galleon Group founder’s brother.

Former McKinsey & Co. partner Anil Kumar told the jury in the Rengan Rajaratnam case that he had passed confidential information about a client, Advanced Micro Devices, to Rengan’s older brother. Rengan is accused of conspiring with Raj, who is serving an 11-year prison sentence, to illegally trade shares of AMD and of Clearwire Corp. in 2008.

Prosecutors played jurors a tape in which Kumar told Rajaratnam that a company owned by Abu Dhabi planned to invested between $6 billion and $8 billion in AMD. “They’ve shaken hands,” Kumar said.

The government then played a second taped phone call, from three hours later, between Raj and Regnan Rajaratnam. The older brother tells the younger that “AMD had a handshake with… the Arabs.”

“The Arabs to put $6 billion. I’m buying some. I bought, I am buying 250 for you, OK?”

“All right, thanks a lot man, I appreciate it,” Rengan is heard to say.

Rengan’s lawyers have argued that their client did not know that his brother’s sources had a fiduciary duty to keep their information secret, or that they received a benefit for it—both of which are required to prove insider trading. No witness has yet directly linked Rengan to the receipt of or trading in confidential tips.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...