'Rajaratnam didn't care about Rajiv Goel's tips'

'Rajaratnam didn't care about Rajiv Goel's tips'

'Rajaratnam didn't care about Rajiv Goel's tips'

Testifying in the biggest insider trading trial in the US in a Manhattan court Monday, Goel argued with defence lawyer Terence Lynam over a deal between Sprint and Clearwire, in which Intel, where Goel was employed at the time, made a $1 billion investment.
The prosecution alleges that Rajaratnam traded on tips provided by Goel, who has pleaded guilty in the case and is a key prosecution witness.

But Lynam argued that Rajaratnam was a sophisticated, accomplished investor, and Goel's tips were barely worth his time-he didn't take any of it into account.

Asked about the specific details of what he revealed to Rajaratnam about Intel's quarterly earnings in 2007, Goel said: "I didn't recall exactly what I said to him, but it was about earnings information I'd gotten from Lenke."

P. Alexander Lenke, another former Intel executive has also testified about how he gave inside information to Goel.

"You can't remember if the information was bad or good information?" Lynam asked.
"Yes sir, I don't remember specifics of numbers, I just passed on information that I got sir," Goel replied

Lynam argued that if anything, given the information on Intel's revenue for the quarter in question, Rajaratnam should have sold or shorted Intel stock.

He also argued that after earnings news was released by Intel on April 18, the stock price moved about 1.5 percent and therefore the information "didn't significantly affect the stock price."

"You don't know how that information was perceived or analysed or processed," Lynam said to Goel of the information he says he provided to his then-friend.

When he pointed to news articles and analyst reports that discussed a potential deal by Sprint and Clearwire, and Intel's potential investment, Goel stressed that those reports were merely speculation.

Lynam also pointed out another phone call in which Goel called Rajaratnam about a prior conversation the pair had about Sprint and Clearwire's joint venture-the Wimax deal-to tell the Galleon chief that his "approach" to the valuation "is wrong."

"You wanted to call and your old friend from Wharton and prove you were smarter than he was, right?" Lynam said.

"He's a lot smarter than I am," Goel said. "Even today."Asked by the prosecution if he told the FBI that he knew that Rajaratnam was going to trade on the information given, Goel said: "I knew."

Goel and the defence lawyer again clashed over the meaning of "anything" in one of the wiretapped conversations.

Lynam argued that when Rajaratnam said, "If you hear anything let me know," he was talking specifically about news being released about the Clearwire Sprint deal at the CTIA cable show.

Goel denied that, and argued that Raj didn't need Goel to pass along what's in the news-that "anything" referred to information Goel might garner as a insider at Intel.
Meanwhile, prosecutors alleged that in the hours after the 2009 arrest of Rajaratnam, his brother Rengan participated in an alleged coverup by removing notebooks with handwritten notes about stocks from Raj Rajaratnam's office.

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