Undercover Audio Reveals Rajaratnam's Frantic Calls After Goldman-Buffett Tip
On Wednesday, Goldman Sachs Chairman and CEO Lloyd Blankfein drew an overflow crowd, when he testified for the prosecution that a former board member, Rajat Gupta, violated the firm's code of conduct by discussing confidential board deliberations with Rajaratnam.
Gupta, who has been cited in an administrative proceeding by the SEC, denies wrongdoing and has sued the agency. Jurors got an encore presentation of the undercover recording of Gupta telling Rajaratnam about a 2008 board meeting in which Goldman Sachs directors talked about buying a bank like Wachovia or an insurance company like AIG.
Jurors also heard from former Intel executive Rajiv Goel, a former close friend of Rajaratnam's who has pleaded guilty to supplying advance tips about the chip maker's profits as well as upcoming deals.
Thursday's testimony by Goel included questioning about an Intel joint venture with Clearwire . Prosecutors say Rajaratnam was trading on inside information about the pending deal, but lost his edge when word of the talks got out.
Prosecutors played a March 25, 2008 phone conversation between Rajaratnam and his brother Rengan Rajaratnam in which Rengan was concerned that the media had picked up on the deal.
Rengan: We're F***ed man
Raj: Huh ?
Rengan: It just hit the Wall Street Journal
Raj: What's that ?
Rengan: The Clearwire stuff
Raj: Uh huh
Rengan: It's all over the Wall St Journal
Raj: OK... What price does it say?
The Intel-Clearwire venture was announced a little over a month later.
The defense says Rajaratnam traded only on public information and expert analysis. For every stock in question, defense attorneys have offered news articles and press releases in an attempt to show that Rajaratnam was trading not on inside tips, but on information that was available to the general public.
Defense lawyers are also attacking the credibility of cooperating witnesses like Goel, who are the heart of the government's case. On cross-examination, defense attorney Terence Lynam questioned Goel about Swiss bank information omitted from his tax returns. Defense attorneys used a similar line of questioning against another cooperating witness, former McKinsey & Co. Senior Partner Anil Kumar.
The trial has not been without lighter moments.
During Thursday's cross examination, Lynam attempted to portray the Rajaratnam/Goel friendship, which spanned nearly 20 years, as one in which the two often joked around.
Lyman asked Goel if he understood that Rajaratnam was joking when he said he wanted to kiss Goel. Goel replied "I hope he was or I've had him wrong the whole time".
Laughter broke out in the courtroom.
The trial resumes on Monday. Until then, here are more of the recordings admitted into evidence this week. And you can find more of the Rajaratnam tapes admitted since the trial began later in this story.
Intel executive Rajiv Goel gets nervous about talking to Raj Rajaratnam on a cell phone that might be tapped. Turns out his instincts were right.
Rengan Rajaratnam calls his brother Raj. Word of a potential deal between Intel and Clearwire--which they allegedly were trading on--has gotten out. "We're f***ed," Rengan says.
Raj Rajaratnam is trying to get ahold of Rajiv Goel.
Rajiv Goel calls Raj Rajaratnam back within five minutes, even though Goel is sick at home. Rajaratnam is trying to get more information about the Intel/Clearwire joint venture, which is known as WiMax.
Rajiv Goel calls Raj Rajaratnam to tell him that "stuff is not happening as planned."