hedge fund tycoon Raj Rajaratnam claims US prosecutors pressed him
to "wear a wire" and record conversations with his Indian-American
friend Rajat Gupta, Goldman Sachs Group Inc director.
In his first interview about his case, Sri Lanka born Rajaratnam
told Newsweek Daily Beast that he was initially asked on the day
of his Oct 16, 2009 arrest to tape his conversations with Gupta,
the former CEO of elite consultancy McKinsey & Co McKinsey.
As late as two weeks before Rajaratnam was sentenced to 11 years
in prison for insider trading, he was still being asked by the
government to turn on Gupta. But he wouldn't wear a wire, he says,
so he could sleep at night.
"They wanted me to plea-bargain. They want to get Rajat. I am not
going to do what people did to me. Rajat has four daughters," he
said referring to Gupta as a "first-class guy."
A spokesman for Gupta's lawyer, Gary Naftalis, referred to
previous statements that his client had done nothing wrong and
that a civil case brought by the US Securities and Exchange
Commission was baseless.
But Rajaratnam felt betrayed by his two Indian American Wharton
classmates, Anil Kumar and Rajiv Goel, on whose testimony the
prosecution case mainly rests.
Kumar, the McKinsey executive, was hired by Galleon as a
consultant. Goel, worked at Intel for eight years. Both of them
pleaded not guilty first, Rajaratnam notes, before they switched
to guilty under prosecutorial pressure.
Asked if he regretted anything, he said clearly referring to the
duo: "I'd probably not be so trusting of people."
In his conversations with Kumar, Rajaratnam had trusted him to
decide what was and was not insider information. "I did not think
a senior partner of McKinsey would violate the confidentiality of
"I assumed he was kosher, that he would not cross the line."
Rajaratnam does not speak well of Kumar. He calls him a "ch-t"-Hindi
for "c-t." "I'm not Indian, but that word fits him," he says.
Kumar had introduced him to Rajat Gupta. The two of them wanted to
start an Indian School of Business in Hyderabad.
"I gave them [the school] a million dollars. I later found out
they never contributed any of their money, and are listed as the
school's founders. And I'm not even a fucking Indian," Rajaratnam
is quoted as saying.
Rajaratnam's South Asian connection makes less sinister some of
the allegations in the trial, the interviewer says. For example,
the prosecution noted that Rajaratnam would visit Goel's house in
Silicon Valley, presumably to talk about Intel.
But the real explanation is more human. "His wife makes really
good chaat [a savory snack]!" Rajaratnam and Goel were very good
friends, so his betrayal hurts him personally.
"There are two types of plea bargains. One is, you cooperate with
the government. You finger 10 other people. The other is a plea
bargain without cooperation." The white defendants all pleaded
without cooperating; they did not wear a wire.
"The South Asians all did the plea bargain with fingering," he
"The Americans stood their ground.
Every bloody Indian cooperated-Goel, Khan, Kumar." He puts it down
to "the insecurity of being an immigrant, lawyers bullying them
into that position."
"Anil Kumar's son worked at Galleon one summer. I used to vacation
with Rajiv Goel's family. Their families knew my family. You don't
think this is going to haunt these guys?"
(Arun Kumar can
be contacted at email@example.com)