Listen to a Wiretapped Call Between Hedge Fund Boss and Pal

Monday, April 04, 2011


As the largest hedge fund insider trading trial in U.S. history enters its fifth week, prosecutors have called 14 witnesses and played 40 wiretapped telephone conversations in the case against Galleon Group founder founder Raj Rajaratnam, who is accused of trading stocks and making tens of millions of dollars in illegal profits based on private information he gathered from friends.  

Prosecutors said the hedge fund boss got a tip from former Goldman Sachs board member Rajat Gupta — who faces action by the U.S. Securities and Exchange Commission though he denied wrongdoing — in October 2008.

"I heard yesterday from somebody who's on the board of Goldman Sachs that they're going to lose $2 per share. The street has them making $2.50," Rajaratnam tells David Lau, a Galleon employee.

"Really?" Lau responds.

"Yeah," Rajaratnam says.

Defense lawyers have argued that Rajaratnam only traded stocks using legitimate analysis and research.

You can hear the full excerpt of the wiretapped conversation between Rajaratnam and Lau here. (Audio contains graphic language)


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Comments [3]

bob from East River

The wire. Dirty deeds indeed.

Apr. 20 2011 11:14 AM
The Green Fool

Like tootally.

Apr. 04 2011 01:20 PM

A hypothetical: Ariad (Aria) stock baselined at ~ .50 (50 cents!) ca. 1999 when other biotechs joined the fray of halcyon hype due to an intellectual property he said she said broohaha. When the matter was settled the stock rocketed to ~ 48$ (almost a 100X or 10,000% increase) in perhaps 4 months (from ~ October 99 through March 00 (when Clinton and Blair had a joint press conference stating that genomic information will be shared sending a wrench into possible patenting of genes and perhaps precipitating the biotech and thence tech stock bubble burst). insiders at Ariad (e.g. founding scientists, etc.) may have been privy to WHEN the settlement was to occur and may have been generous with this information. John Deutch (erstwhile DCI, Director Central Intelligence) admonished for faux pas-ing (lap tops at Starbucks??) and subsequently pardoned seconds to midnight by Clinton when Hillary was proverbially stealing the White House silverware ... has been involved with Ariad [Director??] as he's a member of the proverbial Cambridge Biotech Curia. Wouldn't it be funny if Chelsea (hypothetical) just happened to have purchased Ariad stock during an interestingly convenient time frame? Don Wiley one of the (!conspiracy theorists beware!) post 9/11 missing/dead microbiologists just happened to leave his running car on a bridge over the Mississippi whilst attending a BSA (board of scientific advisors) type meeting and fell into the river ... to be found perhaps ~10 days later. Don was pals with Ariad insiders. if you (one, you, me, i, whomever) picked up 5K of Ariad stock at a convenient time and sold it the day before the Clinton Blair press conference you could have made a cool ~$500K!! When esteemed institutions such as mskcc have CFOs who state: “Sloan is pursuing a systemic approach to reducing expenses and increasing revenues […] One example of this is discouraging terminally ill patients from seeking initial treatment or second opinions from the cancer center […] the admission of such patients is counterproductive […] to Sloan Kettering.” [paraphrasing salient features, MSKCC, CFO/Chief Financial Officer] ... one must remember that the very people or institutions we trust implicitly are not always what they seem and that the forces of commerce (and, too, greed and self servitude) do indeed influence actions. insider stock carpe diems are not immune to this premise.

Apr. 04 2011 10:56 AM

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