NEW YORK — They went to an Ivy League business school together. They vacationed together. And, federal prosecutors say, they schemed together to make inside trades worth millions — sometimes in conversations that were caught on tape by the FBI.
The friendship and alleged conspiracy were described in detail Tuesday by disgraced former Intel executive Rajiv Goel at the Manhattan trial of Raj Rajaratnam, the wealthy hedge-fund manager charged in a massive insider-trading case.
“We were very good friends, and as a friend I shared information with him,” Goel said when asked why he violated strict confidentiality policies at Intel by leaking inside information to Rajaratnam.
In his first day on the witness stand as a key government witness, Goel repeatedly referred to the two men’s kinship as the motive for his admitted securities crimes even as he was betraying the defendant with his testimony.
The relationship grew after the men met at the Wharton School at the University of Pennsylvania.
During one of those conversations, Rajaratnam bragged that “he had a stellar reputation in terms of his ability to predict the financial elements of Intel,” Goel said.
Rajaratnam also said he knew tipsters within the company whom he had rewarded with cars, the witness added.
Soon Goel was providing his own tips.
He told jurors that he had revealed the computer-chip maker’s earnings for the first quarter of 2007 to Rajaratnam before the results were publicly announced. He testified that he frantically tracked down Raj aratnam by phone in the Caribbean to make sure he got the information in time to trade on it.
