Prosecutors turned to a wiretapped telephone call between Galleon Group LLC’s Raj Rajaratnam and his brother Rengan to bolster their criminal insider-trading case against the hedge fund co-founder.
Rajiv Goel, who had worked in Intel Corp.’s treasury group, returned to the witness stand Thursday to testify that he leaked secret information to his friend Raj Rajaratnam. His testimony centered on his alleged 2008 tip that Intel would invest $1 billion in a new wireless network company formed by Clearwire Corp. and Sprint Nextel Corp. Prosecutors played several recordings of Goel telling Rajaratnam about the deal.
To counter possible claims by defense lawyers that the news Goel leaked was already public, prosecutors also played a tape from March 25, 2008, of a conversation between Raj and Rengan Rajaratnam. The Raj-Rengan discussion took place six days after Goel was recorded telling Rajaratnam about the venture and Intel’s investment — and just moments after The Wall Street Journal posted an online story about the Sprint-Clearwire deal.
“It’s all over The Wall Street Journal,” Rengan Rajaratnam told his brother at 8:22 p.m., according to the wiretapped recording played for jurors in Manhattan federal court. “They’re short on details, but they kind of say, you know, they’re looking to raise as much as $3 billion.”
The phone call is intended to show that Goel’s tips to Raj Rajaratnam, beginning March 19, did in fact contain confidential information and included news that hadn’t appeared in the news media.
