When Rajiv Goel Told Raj He Was A Good Man, The Galleon Chief Responded: 'Highly Suspicious!'
On Day 9 of the Raj Rajaratnam insider trading trial, the wiretaps were pulled out again after a day and half of straight testimony from Intel, PeopleSupport and Moody's executives.
As always, Raj starred in the recording. This time, his guest was Rajiv Goel, the former Intel executive who has already plead guilty to occasionally tipping his longtime friend on a merger between Sprint and Clearwire .
At the time of the call, on March 19 of 2008, Goel was a managing director for Intel's treasury group.
Because of that role, Goel was aware of a secret, but rumored joint venture between Clearwire and Sprint Nextel, in which Intel was rumored to be putting in $1 billion. The deal was code-named Project Raid, and in its later stages, Project Grand Slam. (That brings our code-name tally to three)
Goel has known Raj for over 25 years, and Raj loaned him hundreds of thousands of dollars over that time according to the WSJ.
On the call, the two bantered:
RG: You're a good man.
RR: Highly suspicious.
Then, the courtroom reportedly erupted in laughter.
Goel and Raj's friendship can be felt in these wiretaps.
Courtney Comstock, who is at the court today, reports that in a wiretap played this morning -- a recording of a call that took place on March 20, one day after the above telephone call -- Goel pestered his buddy to get him a new job.
"Hey, get me a job with one of your powerful friends man," he said to Raj. "I'm tired of this company." The pair then continue to discuss the investment in Clearwire. Again, Goel says to Raj, "get me a job with one of your powerful friends."
Courtney also noticed that the two men spoke to each other in a peculiar way, sometimes with large chunks of dead air during a conversation.
The Sprint, Clearwire and Intel Tips
In his work at Intel, Goel was "responsible for advising on investments by Intel Capital in the wireless sector," the WSJ says.
On March 24, 2008, Galleon bought 125,800 shares of Clearwire, that the government alleges Raj bought based on tips from Goel. Two days after the purchase, the company's stock surged based on media coverage of the deal. Raj's defense argued during cross-examination that there was a significant amount of public speculation about the joint venture, and Intel's investment in it, both by press and financial analysts,
That was one of three recordings played yesterday. At the time, senior Intel executive Sriram Viswanathan was in the witness stand.
A wiretap from the day of Intel's March 2008 board meeting showed Raj asking Goel about the deal.
RR: April 1st, right?
RR: April 1st, right?
RG: Yeah, but you know, these deals... there are so many people involved. Yesterday our board approved this deal.
RR: I see.
That is not the only trade in which Goel has been part of Raj's alleged conspiracy — Raj also passed on confidential information about a deal involving PeopleSupport to his friend, and then tried to buy shares of the company through Goel's Charles Schwab brokerage account.
A Fugitive Passes On Information About the Hilton Blackstone Deal
Earlier in the day, Moody's credit analyst Margaret Holloway, who took the stand on Thursday, testified that she gave top-secret information about an acquisition of Hilton Hotels by Blackstone to her junior analyst Deep Shah. Shah is accused of then leaking that information to Roomy Khan, another government witness, who then allegedly tipped Raj.
Holloway testified she only told Shah the information "to help him prepare for a credit-rating discussion about Hilton," according to the WSJ. He's now considered a fugitive by the government and is currently living in India, people suspect. He's denied wrongdoing previously.
Raj's defense argued that the sale of Hilton had long been discussed by analysts and the press, and that Raj's purchase of the hotel stock was based on those rumors and legitimate research, not tips.
This story originally appeared in Business Insider
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