JOIN USThe FBI audio clip was among dozens played so far in the biggest Wall Street insider trading trial in decades. Manhattan federal court jurors on Thursday also heard a lawyer for the Galleon Group founder attack the credibility of a key government witness. The tap was introduced into evidence during testimony by former Intel Corp executive Rajiv Goel, a friend of Rajaratnam’s for 17 years, who has pleaded guilty and is cooperating with the government.
Goel has admitted to tipping Rajaratnam on March 19, 2008 about a new wireless network venture between Clearwire Corp and Sprint Nextel Corp in which chipmaker Intel would invest $1 billion. Prosecutors accuse Rajaratnam of buying 125,800 Clearwire shares on March 24 based on inside information. Rajaratnam’s defence is that his trades were based on his own research and publicly available information.
“Oh dude, we’re f*****,” Rajaratnam’s brother Rengan, also a fund manager, said on the March 25, 2008 call. “It just hit the Wall Street Journal.” The government introduced the evidence to support its allegation that Rajaratnam had inside information and then feared he had lost his edge in the market when details appeared in public before an expected May announcement. On the call, Rengan Rajaratnam described some details in the article, including possible capital commitments from Intel, Comcast Corp and Google Inc. Goel admitted on the stand on Tuesday that he violated his obligations of confidentiality to Intel.
“OK Shit,” Rajaratnam responded.
“So, I don’t know how much you got in today, but I think is gonna rip tomorrow,” Rengan Rajaratnam was heard telling his brother, apparently referring to trades and how the stock might react.
Goel told Raj Rajaratnam of similar details, according to another phone tap that has also been played to the jury. The Clearwire venture was announced on May 7, 2008.
The government accuses Sri Lankan-born Raj Rajaratnam of making $45 million in illicit profit. If convicted, he could face up to 20 years in prison.