Authors: Anita Raghavan
Tags: #Finance, #Business & Economics
Lloyd Blankfein’s practice in dealing with the Goldman Sachs board and the events of October 23, 2008:
US v. Gupta
, Testimony of Lloyd Blankfein, June 4, 2012.
Blankfein’s more palatial pad at 15 Central Park West:
Max Abelson, “Viva 15 C.P.W.! Goldman C.E.O. Lloyd Blankfein Closes for $26M,”
New York Observer
, January 18, 2008.
Securities analysts were calling for Goldman to earn $2.76 a share:
US v. Gupta
, Government Exhibit 1653, Goldman Sachs weekly investor relations report showing analysts’ consensus earnings estimates for the fourth quarter in the week of October 17, 2008.
The
Wall Street Journal
reported that Goldman was going to lay off 10 percent of its workforce:
Susanne Craig, “Goldman to Cut 10% of Jobs as Downsizing Wave Grows,”
Wall Street Journal
, October 23, 2008.
Of Goldman’s nine external board members, only one, Stephen Friedman, definitely could not make the call:
US v. Gupta
, Government Exhibit 433, Goldman Sachs 4:15 p.m. Board Posting Call—Status on Attendance.
Gupta’s schedule on October 23 and details of his flight from Barcelona, Spain, on American Airlines Flight 151:
US v. Gupta
, Government Exhibit 3600, Gupta’s calendar from October 23 to October 27, 2008.
Gupta and his wife were headed to Providence on October 24 and his activities there:
Ibid.
At 4:16 p.m., Gomes dialed into the Goldman call:
US v. Rajaratnam
, Testimony of Carol Ann Shields, March 29, 2011; Government Exhibit 75, Certain communications on October 23, 2008, and October 24, 2008.
Blankfein’s report to the board:
US v. Gupta
, Testimony of William George, May 25, 2012; Blankfein testimony, June 4, 2012.
The debate about why Goldman was suddenly going to lose money:
US v. Gupta
, George testimony.
Twenty-three seconds later, Gupta’s secretary telephoned Rajaratnam’s direct work line:
US v. Gupta
, Shields testimony, May 24, 2012.
“Raj is one of the most outstanding hedge fund managers”:
US v. Gupta
, Government Exhibit 1922, Email signed by Gupta but sent by Renee Gomes to Marshall Lux, February 15, 2007.
Gupta’s disclosures to Kumar about his investment in Voyager:
US v. Gupta
, Testimony of Anil Kumar, June 4, 2012.
On October 5, before flying to Europe, Gupta lobbed a call to Rajaratnam:
US v. Gupta
, Government Exhibit 24-T, Transcript of a wiretapped conversation between Gupta and Rajaratnam on October 5, 2008.
“I know it must be an awful and busy week”:
US v. Gupta
, Government Exhibit 25-T, Transcript of a wiretapped message from Gupta to Rajaratnam on October 10, 2008.
For twelve minutes and thirty seconds, the two were connected:
In
US v. Gupta
, Shields said the two were connected for twelve minutes and up to thirty-five seconds.
The next morning, Rajaratnam’s technology portfolio sold 50,000 shares and then 100,000 shares:
US v. Rajaratnam
, Government Exhibit 76, Galleon Tech Trading in Goldman Sachs Stock (GS) from October 21, 2008, through October 24, 2008.
The sales saved Galleon $3.8 million in potential losses:
US v. Rajaratnam
, Government Exhibit 77, Galleon Tech Losses Avoided by Selling Goldman Sachs Stock (GS) on October 24, 2008.
The conversation with David Lau:
US v. Gupta
, Government Exhibit 29-T, Transcript of a wiretapped conversation between Rajaratnam and Lau, October 24, 2008.
“How does it make you feel that your agency is absolutely incompetent?”:
Monica Langley, Kara Scannell, Susan Pulliam, and Susanne Craig, “SEC Chief’s Big Bet on Goldman,”
Wall Street Journal
, May 15, 2010.
“If we don’t get serious about this process”:
Kara Scannell, “Assured of SEC’s Survival, Schapiro Now Fights to Keep Regulatory Teeth,”
Wall Street Journal
, June 11, 2009.
In December 2008, the wiretaps on Rajaratnam’s phone ended:
US v. Rajaratnam
, Testimony of Diane Wehner.
Far divulged that Atheros will do “98, 99 million” in revenue:
US v. Ali Hariri
, complaint, MAG 09 2436, November 4, 2009.
The FBI approach to Far:
US v. Rajaratnam
, Franks hearing, Government Exhibit 89 shows that Far was interviewed by the FBI on April 21 in the presence of his lawyers, suggesting an approach was made earlier.
Walia mention of Far:
In the Matter of Sedna Capital Management, NY-7665, Apjit Walia voluntary testimony, August 1, 2007.
The approach to Lee and the sit-down with his lawyer:
First reported by Susan Pulliam, “The Network: The Feds Close In: Fund Chief Snared by Taps, Turncoats—Prosecutors Stalk Galleon’s Rajaratnam After Finding a Revelatory Text Message,”
Wall Street Journal
, December 30, 2009.
Closing of Spherix:
Ibid.
Stopping off at the Setai and the tip Rajaratnam got on Cisco buying Starent:
US v. Rajaratnam
, Testimony of Anil Kumar, March 15, 2011.
“You know Anil, I am really disappointed”:
Ibid.
Kumar’s purchase of 300 Starent shares:
Ibid.
On October 13, Cisco unveiled a $2.9 billion deal for Starent:
US v. Rajaratnam
, Government Exhibit 945, Press release entitled: “Acquisition of Starent Networks Expands Cisco’s Mobile Internet Offerings for Service Providers,” October 13, 2009.
The description of Rajaratnam on Thursday, October 15, 2009, and the size of Galleon:
Anita Raghavan, “Power and Pleasure,”
Forbes
, October 11, 2010.
Galleon outlasted the Bowman Technology fund and Andor Capital:
Katherine Burton and Saijel Kishan, “Raj Rajaratnam Became a Billionaire Demanding Edge,” Bloomberg News, October 19, 2009. Andor has since reopened, according to Alistair Barr,
MarketWatch
, March 2, 2011.
One of nearly fifteen hundred funds to close its doors:
According to Hedge Fund Research Inc., 1,471 funds liquidated in 2008.
“It is our investors’ money and they have the right:
Letter from Lukasz Sito, May 5, 2011, quoted in
US v. Rajaratnam
, Sentencing Memorandum on behalf of Raj Rajaratnam.
By 2009, Galleon was on track to earn 20 percent in performance fees, and some big investors were close to pouring money:
Raghavan, “Power and Pleasure.”
He and his wife, Asha, were set to leave for London:
Ibid.
“I am the last man standing”:
Ibid.
In the wee hours of the morning, B. J. Kang was talking with a member of the Office of Customs and Border Protection:
US v. Raj Rajaratnam, Rajiv Goel, and Anil Kumar
, 09 Mag 2306, Complaint, October 15, 2009.
When Streeter secured a guilty plea from Marc Dreier in May 2009:
Benjamin Weiser, “Lawyer Gets Twenty Years in $700 Million Fraud,”
New York Times
, July 13, 2009; John Ryan, “The 500 Lawyer Limelight: Jonathan Streeter,” Lawdragon, August 5, 2012.
The two complaints, efforts to get Chiesi to cooperate, and her arrest:
US v. Danielle Chiesi
, 09 CR 1184, Miranda hearing, Testimony of FBI agent Kathleen Queally, November 22, 2010. Queally testified that there were two complaints. If the FBI had succeeded in getting Chiesi to cooperate, the complaint naming Chiesi and two other individuals, believed to be Robert Moffat and Mark Kurland, would “probably not” have been filed that day. The reason the FBI was trying to get Chiesi to cooperate was that it thought she could engage in a covert operation. “There were other people we were looking to obtain information on,” Queally said, adding that Rajaratnam was part of a separate complaint. Chiesi sought the Miranda hearing after her arrest, saying that she was questioned for about ninety minutes without being advised of her right to remain silent.
Chiesi’s affair with Moffat and her longtime lover Kurland:
James Bandler and Doris Burke, “Dangerous Liaisons at IBM,”
Fortune
, July 26, 2010.
The description of the arrest of Chiesi:
US v. Chiesi
, Miranda hearing, Queally testimony, November 22, 2010.
Chiesi thought it was a joke with Halloween being around the corner:
US v. Chiesi
, Miranda hearing, Testimony of Danielle Chiesi, November 22, 2010.
“Is my mom okay?”:
Ibid.
She was actually worried there might be a marijuana joint lying around:
Susan Pulliam and Chad Bray, “Key Plotter Pleads Guilty in Galleon,”
Wall Street Journal
, January 20, 2011.
All they found was Chiesi’s pet cat and her fish:
US v. Chiesi
, Miranda hearing, Chiesi testimony.
The conversation between Chiesi and the agents regarding cooperation and Rajaratnam’s arrest:
Based on testimony from Wehner, Queally, and Chiesi at the Miranda hearing.
Rajaratnam was on his exercise bike and his arrest:
Suketu Mehta, “The Outsider,”
Newsweek
, October 23, 2011.
Two FBI agents, one playing good cop:
Ibid.
They asked her to write a telephone number:
US v. Chiesi
, Miranda hearing, Chiesi testimony.
Chiesi confessed that she didn’t have a bra on:
Ibid.
“Well your sweater’s big enough,” Chiesi remembers Wehner replying:
US v. Chiesi
, Miranda hearing, Chiesi testimony.
The 7:30 a.m. deadline:
US v. Chiesi
, Miranda hearing, Queally testimony.
The story of Dominic Barton learning of Kumar’s arrest while at a client meeting in Madrid:
Joanna Pachner, “McKinsey & Co.: The Man Behind the Curtain,”
Canadian Business
, April 7, 2011.
His wife lived in Shanghai and his children were in boarding school in Singapore:
Ibid.
Barton’s personal experience with the company’s “up or out” management style:
Ibid.
Kumar’s collapse when agents first came to arrest him:
First reported by George Packer, “A Dirty Business: New York City’s Top Prosecutor Takes on Wall Street Crime,”
New Yorker
, June 27, 2011. Kumar’s fainting was confirmed in
US v. Anil Kumar
, 10 Cr. 13 (DC), Government’s sentencing memo.
In November 2002, Rajaratnam delivered a rousing appeal for Prabhakaran’s cause:
David Rose, “Crouching Tiger, Hidden Raj,”
Vanity Fair
, September 30, 2011.
Rajaratnam referenced as “individual B” in federal complaint in 2006:
Evan Perez and Matthew Rosenberg, “Rajaratnam Wasn’t Charged in Terrorism Probe,” DowJones Newswires, October 17, 2009.
Walden’s remarks to the
Wall Street Journal
:
Evan Perez and Eric Bellman, “The Galleon Case: Officials Say Investor’s Donations Wound up with Sri Lanka Rebels,”
Wall Street Journal
, October 19, 2009.
One investor who had seen Rajaratnam led out in handcuffs:
Susan Pulliam, “The Network: The Feds Close In: Fund Chief Snared by Taps, Turncoats—Prosecutors Stalk Galleon’s Rajaratnam After Finding a Revelatory Text Message,”
Wall Street Journal.
The lyrics of “The Good Ship Galleon” song:
Reported by Clemente Lisi, “Hip-Hop Track of the Trade,”
New York Post
, October 17, 2009.
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.