Friday, 12 February 2016
Last updated 34 min ago
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.