We haven’t heard from accused insider trader Raj Rajaratnam in a while, but it appears the government is preparing even more charges against the former head of the Galleon Group.
In a court filing on Friday, lawyers for Rajaratnam cite a letter written by prosecutors in late March saying they intend to “offer evidence on dozens of previously unidentified stocks and co-conspirators on the counts alleged against only one of the defendants.” The letter is attached as an exhibit to the filing, in which Rajaratnam’s lawyers argue his case should be separated from that of his alleged co-conspirator Danielle Chiesi. The duo originally appealed to the judge for separate trials about a month ago.
Among the additional companies identified by the government is Goldman Sachs, according to the letter. Prosecutors said they are focusing on trades in Goldman shares between June and October of 2008, just as the financial crisis was in full swing and Lloyd & Co. was negotiating a deal to sell $5 billion in preferred stock to Warren Buffett.
There’s no suggestion in the document that anyone at Goldman tipped Raj off to the pending deal, but prosecutors said their investigation is ongoing and they fully anticipate it “will lead to further evidence related to the charged crimes, including identification of additional uncharged co-conspirators.”
Another company previously unidentified by prosecutors is @Road, a tech firm that Galleon had a large stake in before shutting down amid the insider trading allegations. The government said its probe focuses on trades made in @Road around December 2006, the same month the company announced a deal to be acquired by another tech company called Trimble.
Interestingly, Krish Panu, who was the president and CEO of @Road at the time of the merger, also worked at Galleon and has been accused by the government of tipping off Rajaratnam about merger negotiations between PeopleSupport, an outsourcing company, and Essar Group of India. Panu, at the time, served as a director on the PeopleSupport board. He has not been charged criminally.
After Raj was arrested in October of 2008, Panu resigned from the board of Concurrent Computer Corp., another computer company and appears to have stepped down from the Trimble board as well.
Meanwhile, the SEC on Monday urged U.S. District Judge Jed Rakoff to approve its $763,000 settlement with Schottenfeld Group, a trading firm that employed several traders ensnared in the Galleon insider trading ring.