Raj Rajaratnam has maintained his innocence since he was escorted out of his Sutton Place apartment almost two months ago and apparently that’s the story he’s sticking with. His lawyers rejected federal insider trading charges this morning, for several reasons. These are our favorite:
1) The government shouldn’t have been allowed to wiretap him in the first place, because when it sought approval to do so, failed to mention it had already interviewed him under oath for another investigation, seen Galleon documents, etc. So whatever they may have overheard as a result of the taps— be it, “I can’t believe we’re getting away with this shit!” or otherwise— should not be held against Raj-Raj or Galleon.*
2) Let’s just say Raj received inside information (WHICH HE DIDN’T)— no one was ever paid or otherwise compensated for their hot tips.
3) Galleon wouldn’t have needed to gather and trade on inside information because the research done by its analysts was “more detailed and precise” than anything they could’ve gotten illegally. Unless the alleged inside information had the same in-depth research behind it as Galleon’s, i.e. a young analyst modeled Lululemon spandex on a conference room table, Raj would’ve had no use for it.
Here’s the full response, via DealBook:
*I have to say the government really fucked up on this one. Not because they shouldn’t have wiretapped Raj— that’s fine but because they failed Snooping 101. This is like when you think someone’s up to something, and you go and read their emails to check it out. When you find out you were right, you hold onto that info and then wait for them to fuck up and reveal it to you themselves. You can’t admit you know what you know because you used less than legitimate tactics to catch them, i.e. you were reading their shit. This is basically the same thing. God.
Posted by guest , Nov 24, 2009 9:37AM
I'd call him Rat-Rat.
Posted by guest , Nov 24, 2009 9:43AM
Sutton Place? Stay classy, big curry.
Posted by guest , Nov 24, 2009 9:46AM
That a$$ never gets old
Posted by guest , Nov 24, 2009 9:46AM
LuLuLemon started in Vancouver. The owner is not a fan of the asians....
Posted by guest , Nov 24, 2009 9:47AM
Wait, they had their own models?
Posted by guest , Nov 24, 2009 9:49AM
@4 and your point?
Posted by guest , Nov 24, 2009 9:50AM
Bess, you look fantastic. Have you been working out?
Doug Masters
Posted by guest , Nov 24, 2009 9:53AM
@4 true point. Word is that he chose the name because asians have a hard time pronouncing it.
Posted by guest , Nov 24, 2009 9:55AM
would for sure hit it.
Posted by guest , Nov 24, 2009 9:55AM
Yes because he was actually paying for the sex. The tips were just unrelated pillow talk.
Posted by guest , Nov 24, 2009 9:58AM
@10 who was he banging? chiesi?
Posted by guest , Nov 24, 2009 10:05AM
@ 11 don't know if it was anybody. I was just trying to get Ira Sorkin-y and come up with a plausible alibi for the unmarked 20s. And anyway, don't be so red state with your thinking. Remember Octopussy was a playa in this too.
Posted by guest , Nov 24, 2009 10:06AM
ru-ru-ramen
Posted by guest , Nov 24, 2009 10:06AM
To accommodate the young Turk.
Coppola Claret?
Blackstone Merlot?
Sterling Cab?
Greg Norman Shiraz?
-Ex-Lehman Quant, CFA, MBA
Posted by guest , Nov 24, 2009 10:07AM
PR flacks are such irritating pussies.
Posted by guest , Nov 24, 2009 10:08AM
ru-ru-remon
Posted by wcburrs87 , Nov 24, 2009 10:10AM
Question for you guys - say Raj got his hands on LuLuLemon's newest pair of stretch workout pants. These aren't released yet and he's the only person outside the company with the pants. He has some young analyst try them on, they look good, he buys up some stock. Is this insider trading or just awesome, ground breaking research and analysis?
Posted by guest , Nov 24, 2009 10:11AM
re the *, whose emails have you been reading, bess?
Posted by guest , Nov 24, 2009 10:11AM
@ 16 = racist. we're better than that.
Posted by guest , Nov 24, 2009 10:13AM
@14 with fowl, maybe a nice chablis.
-another former Lehman quant.
Posted by guest , Nov 24, 2009 10:14AM
@19- no - we are really not
Posted by guest , Nov 24, 2009 10:14AM
I'd tap that.
-Lester Freamon
Posted by guest , Nov 24, 2009 10:15AM
@19 = Associate, Akin Gump
Posted by guest , Nov 24, 2009 10:15AM
@17-- depends. if he pays a young analyst with some booty to model them on the conference table, he's getting material, non-pubic information, i'd say.
Posted by Tax Chick , Nov 24, 2009 10:16AM
Ah... fruit of the poisonous tree... always been a fan...
Posted by ZHLovesLittleBoyz , Nov 24, 2009 10:22AM
@2, fantastic line
Posted by guest , Nov 24, 2009 10:25AM
@21 you don't think, say, 13 was marginally better than 16, though?
-not 19
Posted by Becky Boot Fan , Nov 24, 2009 10:31AM
Damn...them sexy feet make me wanna go shrimpin.
And ya'll know...shrimpin ain't easy.
Posted by guest , Nov 24, 2009 10:31AM
I am not examining my motives.
-13,16
Posted by Tax Chick , Nov 24, 2009 10:50AM
@14, 20 - painful, just painful!
Posted by guest , Nov 24, 2009 11:21AM
I think the government has a very weak case this time. You simply can't prove anything based on those evidences. The insider trading law basically is just a joke.
Posted by guest , Nov 24, 2009 11:45AM
Naga, Naga, not gonna trade here anymore.
Posted by guest , Nov 24, 2009 2:27PM
@31 The government has yet to disclose the full extent of the evidence that it has obtained re: Raj-Raj. I would be willing to wager that one of the defendants Danielle Chiesi, Anil Kumar or Rajiv Goel is going to plead guilty and will be prepared to testify against Raj.
As such, it is way way too early in the game to suggest that the government has a weak case.
Posted by guest , Nov 24, 2009 2:44PM
@33 Legally, how do you prove I make a trade based on non-public material information? Yes maybe you can prove that I know the information, but that doesn't prove I make my trade based on that particular information. Danielle or Anil can only prove the former but not the latter. It may be easy to prove it when one trades the stock one day before the event happens, but how about two weeks? three months? Where is the line?
Posted by guest , Nov 24, 2009 3:08PM
@34
Please read the original complaint filed by the Feds on October 16th Raj's response to the complaintfiled today.
Raj has denied that he received information from Anil Kumar re: AMD or from Rajiv Goel re: Clearwire. IF either is willing to testify that Raj material non-public information then that is the first step in proving the case of the Feds(that Raj received material non-public information).
The next step is to show that Raj made transactions in those securities after receiving the information. The complaint actually documents that he made trades on both those securities after receiving the information. In the case of Clearwire a profit and in the case of AMD losses were mitigated as a result of Raj receiving the information . The Feds also have proof that Raj bought stock in PeopleSupport (and later sodl it at a profit) in a Chales Schwab account that was in Rajiv Goel's name and has wire tap evidence to show that Raj told Rajiv that he (Raj) saw an opportunity and availed of it in Rajiv's name.
The wire-tap evidence is in itself strong enough to help the Feds convict Raj. That is why his lawyers have taken the aggressive position that the wire-tap evidence was obtained improperly by the Feds.
I suspect that the Feds have done their homework on this case and it is highly likely that Raj will be facing a substantial prison sentence.