Rajaratnam was charged with trading on inside information in Akamai, AMD, Clearwire, and Google, and details of the complaint: US v. Raj Rajaratnam, Rajiv Goel, and Anil Kumar complaint, 09 Mag 2306, October 16, 2009.
The cooperating witness also known as Tipper A in the SEC action: Securities and Exchange Commission against Galleon Management LP et. al, 09 CV 8811, October 16, 2009.
They visited Michael Cardillo in the lobby of his building in November 2009: US v. Gupta, Testimony of Michael Cardillo, May 30, 2012.
Cardillo, who burst into tears after Raj’s arrest: Susan Pulliam and Michael Rothfeld, “Plea Deals Ramp Up Pressure in Galleon,” Wall Street Journal, January 27, 2011.
Cardillo’s recording of calls with Michael Fisherman: US v. Gupta, Cardillo testimony.
Shortly before noon, Adam Smith saw Rengan walk “dramatically” into his brother’s office: David Glovin, Patricia Hurtado, and Bob Van Voris, “Rajaratnam’s Brother Took Notebooks After Arrest, Smith Says,” Bloomberg, March 29, 2011, cited March 27 court papers, in which Smith is said to have told prosecutors that he saw Rengan remove the notebooks after his brother’s arrest.
Smith’s receiving inside information on Nvidia and trading on it: US v. Adam Smith, 11 Cr. 79 (JSR), Government sentencing memo (hereafter Government’s Smith memo).
Rengan sought to confirm that the reference in a May 2008 call was not to the Morgan Stanley source: Glovin, Hurtado, and Van Voris, “Rajaratnam’s Brother Took Notebooks After Arrest, Smith Says”; US v. Rajaratnam, Memorandum of Law in Support of Defendant Raj Rajaratnam’s Motion to Exclude Testimony Concerning Certain Events After Mr. Rajaratnam’s Arrest, March 27, 2011.
Adam Smith’s destruction of his laptop and other actions he took after Rajaratnam’s arrest: US v. Rajaratnam, Testimony of Adam Smith, March 30, 2011.
The presentment of Rajaratnam and Kumar before US magistrate judge Douglas Eaton: US v. Rajaratnam, M-09-2306, Transcript of Proceedings, October 16, 2009.
“I’m sorry”: George Packer, “A Dirty Business: New York City’s Top Prosecutor Takes on Wall Street Crime,” New Yorker, June 27, 2011.
When he was first arrested he was not allowed to use the bathroom: Glovin, Hurtado, and Van Voris, in “Rajaratnam’s Brother Took Notebooks After Arrest, Smith Says,” cite the remark from a February 1 FBI interview summary of Smith.
Kumar’s bail package secured by his $2.5 million home: Revealed at the presentment on October 16, 2009.
Rajaratnam’s $5 million bail package: Ibid.
About a week after his arrest Rajaratnam brought over a fax to Smith: US v. Rajaratnam, Smith testimony, March 30, 2011.
Morvillo’s career and his contribution to the white-collar defense practice: Peter Lattman and Benjamin Weiser, “Robert Morvillo, 73, Legal Pioneer, Dies,” New York Times, December 25, 2011.
Government prosecutors had recently learned that she and her husband, Sakhawat, had submitted a doctored work schedule: US v. Whitman, Testimony of Roomy Khan, August 7, 2012.
It took prosecutors only two in-person meetings: US v. Anil Kumar, 10 Cr.13 (DC), Government Kumar Sentencing Memo, July 16, 2012.
Chapter Thirty-Four: “He’s a Bad Man”
Gupta got on the board of trustees for the University of Chicago in 1995: University of Chicago Chronicle, August 17, 1995.
Rajaratnam, Gupta said, he later learned had taken his money out: US v. Gupta, Defense Exhibit 2105r showed that Rajaratnam had taken about $25.2 million out of Voyager; in Defense Exhibit 4015-T, Transcript of a wiretapped conversation between Rajaratnam and his lieutenant Sanjay Santhanam, Rajaratnam says in connection with Voyager, “I hope Rajat is a big boy. You know?…I didn’t tell him I took that equity out.”
The SEC was preparing to file civil fraud charges against Goldman: Alistair Barr, “Goldman Had Nine Months Warning from SEC—Report,” DowJones Newswires, April 17, 2010.
“He’s a bad man”: Patricia Hurtado, “Goldman’s Dahlback, Berkshire’s Jain May Be Gupta Witnesses,” Bloomberg News, January 29, 2012.
Alok “Rodinhood” Kejriwal’s observations of Gupta at HBS: Interview with Alok Kejriwal, August 10, 2012.
In mid-April, the Wall Street Journal reported: Susan Pulliam, “Goldman Director in Probe; Prosecutors Examine Trades by Galleon in Bank’s Shares as Investigation Widens,” Wall Street Journal, April 13, 2010.
Chapter Thirty-Five: The Gupta File
The agency was still struggling to get its hands on the fourteen thousand hours of recordings: Zachery Kouwe, “Judge Allows S.E.C. to Add Galleon Case Charges,” Dealbook, January 25, 2010.
Naftalis’s representation of Muriel Siebert: See http://www.kramerlevin.com/gnaftalis/.
Just a month before, Fortune magazine had run a devastating piece: Duff McDonald, “Rajat Gupta: Touched by Scandal,” Fortune, October 1, 2010.
George Canellos joined the SEC the summer before from Milbank, Tweed: See http://www.sec.gov/news/press/2009/2009-125.htm
“The government’s unprecedented use of electronic surveillance”: David Scheer, Joshua Gallu, and David Glovin, “Rajaratnam Slams Wiretaps, Cites Analysts in Defense,” Bloomberg, November 24, 2009.
On May 7, 2010, Rajaratnam’s lawyers filed a motion to suppress the recordings: US v. Rajaratnam and Danielle Chiesi, S1 09 CR.1184 (RJH), Defendant Raj Rajaratnam’s Memorandum of Law in Support of His Motion to Suppress Evidence Derived from Wiretap Interceptions of His Cellular Telephone, May 7, 2010.
On August 12, 2010, Judge Holwell decided to hold a hearing to rule on the wiretaps: “Galleon Founder Wins Hearing on Wiretaps,” Dealbook, August 13, 2010.
Lindi Beaudreault told the court: US v. Rajaratnam, Franks hearing, Testimony of Lindi Beaudreault, October 4, 2010.
But Michaelson painted a different picture: US v. Rajaratnam, Franks hearing, Testimony of Andrew Michaelson, October 4 and 5, 2010.
“It does not take a rocket scientist to understand”: Bharara’s remarks at the New York City Bar Association, October 20, 2010. See http://www.nycbar.org/44th-street-blog/2010/10/21/preet-bharara-on-the-future-of-white-collar-enforcement-a-prosecutors-view/?option=com_wordpress&Itemid=6.
Only a month later, on November 24, did Judge Holwell issue an opinion: US District Court, Southern District of New York, Memorandum Opinion and Order, November 24, 2010.
“I heard yesterday from someone who’s on the board of Goldman Sachs”: US v. Rajaratnam, Government Exhibit 678-T, Transcript of a wiretapped conversation between Rajaratnam and Lau, October 24, 2008.
On January 21, the US attorney’s office unveiled a new indictment: Jonathan Stempel, “Rajaratnam Got Information Leaked by MS banker: Prosecutors,” Reuters, January 21, 2011.
On Tuesday, March 1, 2011, the SEC filed a civil administrative action against Gupta: John Helyar, Carol Hymowitz, and Mehul Srivastava, “Gupta Secretly Defied McKinsey Before SEC Tip Accusation,” Bloomberg, May 17, 2011.
“I am stunned and shocked by the proposed action”: Email on March 1, 2011, from Rajat Gupta to business associates and friends.
Chapter Thirty-Six: Kumar Sings
“Greed and corruption”: US v. Rajaratnam, Assistant US attorney Jon Streeter’s opening argument, March 9, 2011.
The youngest son of a Cleveland lawyer: Kaja Whitehouse, “Going After Galleon: Low-Profile Prosecutor Is Thrust into Spotlight,” New York Post, March 25, 2011.
By the time the trial started, of the forty-seven conspirators the government had charged, twenty-three had pleaded guilty: George Packer, “A Dirty Business: New York City’s Top Prosecutor Takes on Wall Street Crime,” New Yorker, June 27, 2011.
On the afternoon of Thursday, January 7, 2010: Zachery Kouwe, “Guilty Plea in Galleon Insider Trading Case,” Dealbook, January 7, 2010.
The details of Kumar’s plea and the maximum sentence: US v. Anil Kumar, Transcript of Kumar’s guilty plea before then federal judge Denny Chin, January 7, 2010. Judge Chin is now an appeals court judge.
“You
had an understanding or agreement with Mr. Rajaratnam” and following exchange: Ibid.
A year after Kumar’s plea, Chiesi pleaded guilty: Justice Department, “Hedge Fund Employee Danielle Chiesi Pleads Guilty in New York to Insider Trading Charges,” press release, January 19, 2011; Susan Pulliam and Chad Bray, “Key Plotter Pleads Guilty in Galleon,” Wall Street Journal, January 20, 2011.
Streeter and Alex Chiesi had at one time literally lived next to each other: Alex Chiesi, when contacted about being a neighbor of Streeter’s, said, “That is completely false.” However, city property records show that Chiesi resided at the same Upper West Side address as Streeter in 2009.
Raj Rajaratnam knew “tomorrow’s business news today”: US v. Rajaratnam, Streeter opening argument.
Sat Rajaratnam, flanked by six lawyers, at the center of the defense table: Peter Lattman, “It’s Greed vs. a Picture of Solid Research in Galleon Trial,” Dealbook, March 9, 2011.
All of his previous convictions—Anthony Cuti, Marc Dreier: Whitehouse, “Going After Galleon.”
His unsuccessful bid in 1974 to convict Meyer Lansky: Grant McCool, “Rajaratnam’s Lawyer Dowd—A Man for Big Cases,” Reuters, February 18, 2011; Daniel E. Ginsburg, The Fix Is In: A History of Baseball Gambling and Game Fixing Scandals (North Carolina: McFarland, 1995).
Dowd’s expletive-filled email to Chad Bray: Packer, “A Dirty Business.”
The “New Sheriff of Wall Street”: William D. Cohan, in “Preet Bharara: The Enforcer of Wall Street—Term Sheet,” Fortune, August 2, 2011, cites the Washington Post as dubbing Bharara the “Sheriff of Wall Street.”
Bharara as one of Time’s 100 Most Influential People: “The World’s 100 Most Influential People,” Time, April 30, 2012. See http://www.time.com/time/specials/packages/completelist/0,29569,2111975,00.html.
Bharara’s evenhanded approach in the Senate investigation: Benjamin Weiser, “For Manhattan’s Next U.S. Attorney, Politics and Prosecution Don’t Mix,” New York Times, August 9, 2009.
The Senate confirmed Bharara in August 2009: On its website, the Manhattan US attorney’s office says that Bharara was nominated for the job by President Obama on May 15, 2009, confirmed by the Senate on August 7, and sworn in on August 13, 2009. See http://www.justice.gov/usao/nys/meetattorney.html.
Bharara’s daughter called his office “humongo”: Bharara’s remarks at swearing-in ceremony, October 13, 2009.
“My mother is the kindest, and most forgiving person”: Ibid.
The government said Rajaratnam pocketed as much as $75 million from his illegal trades: Prosecutor Reed Brodsky said at Rajaratnam’s sentencing that Rajaratnam pocketed between $70 million and $75 million through outright gains and losses avoided from his illegal trades. Judge Holwell said a “reasonable estimate” of the total gains arising from Rajaratnam’s offenses are “greater than $50 million but less than $100 million.”
Rajaratnam’s net worth of $1.3 billion at one time: Forbes in March 2009 listed Rajaratnam as having a net worth of $1.3 billion.
“Disturbingly, many of the people who are going to such lengths to obtain inside information”: Bharara’s remarks at the New York City Bar Association on October 20, 2010.
Preetinder means the “one who loves God”: Alisa Chang, “Meet Preet Bharara: New York’s Highest-Profile Prosecutor,” WNYC News, January 27, 2011.
Bharara’s birth in Ferozepur in 1968 and his parents’ journey to America: Weiser, “For Manhattan’s Next U.S. Attorney, Politics and Prosecution Don’t Mix.”
“My dad was more of a tiger dad”: Sarah Jacob, “Preet Bharara on Insider Trading, Rajat Gupta and Wiretaps,” NDTV.com, August 1, 2012.
Bharara’s education at the Ranney School: Chang, “Meet Preet Bharara”; Cohan, “Preet Bharara: The Enforcer of Wall Street.”
Vinit went on to found a business called Diapers.com: Ibid.
“Look what Preetie did”: Interview with Christine Gasiorowski, June 16, 2011.
Chip Clark’s recollections of Preet: Interview with Chip Clark, September 21, 2011.
His friendship with Viet Dinh: Cohan, “Preet Bharara: The Enforcer of Wall Street.”
The couple live in Westchester County: Peter Lattman, “The Bruce-Bharara Bromance,” Dealbook, November 1, 2012.
“The evidence will show that the government has it wrong”: John Dowd opening argument, March 9, 2011.
Kumar’s definition of a hedge fund and “That would be a very big mess”: US v. Rajaratnam, Testimony of Anil Kumar, March 10, 2011.
“Ahhh…like a baby treats a diaper”: US v. Rajaratnam, Government Exhibit 692-T-R, Transcript of a wiretapped conversation among Rajaratnam, Horowitz, and Smith.
“I think you are being very generous”: US v. Rajaratnam, Government Exhibit 534-T, Transcript of a wiretapped conversation between Rajaratnam and Gupta, July 29, 2008.
A few days before, Gupta took a leave of absence from his own private equity fund, New Silk Route: Saijel Kishan and Cristina Alesci, “Gupta Takes Leave from New Silk Route Amid SEC Charges,” Bloomberg, March 10, 2011.
Stepped down as adviser to the Bill and Melinda Gates Foundation: Andrew Jack, “Gupta Resigns from Gates Foundation,” Financial Times, March 27, 2011, quotes a statement of the Gates Foundation saying that “Rajat has stepped down from his role on the Foundation’s Global Development advisory panel until these matters are resolved.”
“You wrote here it was going to be tricky”: US v. Rajaratnam, John Dowd’s cross-examination of Kumar, March 15, 2011.
Presence of Bharara, Sorkin at Blankfein testimony: Packer, “A Dirty Business.”
Holwell rhymed the last syllable of Blankfein’s name with “bean”: David Glovin, Bob Van Voris, and Patricia Hurtado, “Rajaratnam Jury Candidates Ask ‘Lloyd Who?’ on Insider Trial’s First Day,” Bloomberg, March 9, 2011.
“My sense of it, yes” and following remarks by Blankfein: US v. Rajaratnam, Testimony of Lloyd Blankfein, March 23, 2011.
Dowd’s questioning of Blankfein and his responses: Ibid.
Blankfein shaking Rajaratnam’s hand: Basil Katz and Lauren Tara LaCapra, “Blankfein Extends Hand to Rajaratnam Defense Team,” Reuters, March 24, 2011.
“To do your homework but to still cheat on the test” and “have two torpedoes in the water”: US v. Rajaratnam, Testimony of Adam Smith, March 29, 2011.
Schutte cast the research effort at Galleon as disciplined and Rajaratnam as well prepared, knowing “what questions to ask”: US v. Rajaratnam, Testimony of Richard Schutte, April 12, 2011.
Brodsky’s cross-examining of Schutte on SpotTail: David Glovin, Patricia Hurtado, and Bob Van Voris, “Rajaratnams Invested $25 Million in Fund Run by Defense Witness,” Bloomberg, April 15, 2011; Kaja Whitehouse, “Raj’s High Wires, Sent Hedgie $25M,” New York Post, April 15, 2011.
“He could level the playing field for kids”: US v. Rajaratnam, Testimony of Geoffrey Canada, April 13, 2011.
Jarrell had been paid $200,000 by the defense: Chad Bray, “Witness Cites Public Data,” Wall Street Journal, April 16, 2011.
“Conquer the stock market at the expense of the law”: Reed Brodsky closing argument, April 19, 2011.
“the greediest man”: John Dowd closing argument, April 19, 2011.
As to count one, “Guilty”: US v. Rajaratnam, Transcript of verdict, May 11, 2011.
Chapter Thirty-Seven: An Unhappy Diwali
“It bothers me a little bit when people suggest”: George Packer, “A Dirty Business: New York City’s Top Prosecutor Takes on Wall Street Crime,” New Yorker, June 27, 2011.
At first, P&G asked if it would be sufficient for prosecutors to question one director: A P&G spokesman said the firm cooperated fully with the government and made available both current and former directors and senior executives.
Brodsky’s discovery of Rajaratnam’s investment in Schutte’s fund and Smith’s role: Kaja Whitehouse, “Broadway Brodsky Pit Bull Crime Fighter’s Next Target: Rajat Gupta,” New York Post, M
ay 21, 2012; Government’s Smith sentencing memo.
It took two FBI agents showing up at his home at 6:42 a.m.: US v. Gupta, Testimony of Ayad Alhadi, May 31, 2012.
Kumar met with the government more than ten times, making seven trips from California to New York: US v. Anil Kumar, 10 Cr.13 (DC), Government’s Submission Pursuant to Section 5K1.1 of the Sentencing Guidelines (hereafter government’s Kumar sentencing memo), July 16, 2012.
Prosecutors were asking for a prison sentence of as many as twenty-four and a half years for Rajaratnam: Peter Lattman, “US Is Seeking Maximum Prison Term in Galleon Case,” New York Times, August 9, 2011.
Rajaratnam declined to take the opportunity to speak at his sentencing: Ibid.
On October 13, Judge Holwell sentenced Rajaratnam to eleven years in prison, the longest ever in an insider trading case: US v. Rajaratnam, Transcript of sentencing, October 13, 2011.
It reflects “a virus in our business culture”: Ibid.
The SEC’s dismissal of its administrative proceeding against Gupta and the original suit by Gupta: Peter Lattman, “SEC Drops Proceeding Against Rajat Gupta,” Dealbook, August 4, 2011.
Judge Rakoff ruling that Gupta’s lawsuit could proceed: Rajat K. Gupta v. Securities and Exchange Commission, 11 Civ. 1900 (JSR), Opinion and Order, July 11, 2011.
Kanchan Gupta was driving from work when his brother called: Kanchan Gupta letter written on behalf of his older brother before his sentencing.
Gupta paid $1.65 million in 2000 for his pied-à-terre at the Century: City Register, County of New York, Deed for purchase of residential unit 22K in 25 Central Park West; purchase price is from LexisNexis.
15 Central Park West is home to Dan Loeb, Blankfein, and Weill: New York City property tax records for Loeb, Blankfein, and Weill.
Chapter Thirty-Eight: Et Tu, Kumar?
Seven months earlier, he had been arraigned on charges of one count of conspiracy to commit securities fraud and five counts of securities fraud: Michael Rothfeld, Susan Pulliam, and S. Mitra Kalita, “Gupta Case Targets Insider Culture,” Wall Street Journal, October 27, 2011.
The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund Page 54
