As you probably know, Raj Rajaratnam was just found guilty of all 14 counts on insider trading and conspiracy to commit securities fraud.
The insider trading evidence that was revealed in the wiretaps of Raj’s conversations with a spunky (some people might even say slutty, or as Raj put it, “trashy”) hedge fund analyst, McKinsey execs, a Goldman board member, and an Intel executive was fascinating. We covered it extensively.
In addition to all of the damning evidence, the tapes also gave a look into the life of a billionaire: Raj’s vacations to France, Italy, Miami, and the Caribbean, his dinners at Nobu, Raj jet-setting, eating dinner with important people, getting honored at fancy dinner parties, and much more…
Rajaratnam's family vacationed in Saratoga Springs, where Raj re-connected with his college friend, Anil Kumar.
Saratoga Springs is near Disney Land. Raj and Asha Pabla, his wife (pictured), have 3 children.
Asha did not appear in court once.
Later that year, Raj attended a charity event in New York City with Anil Kumar, a senior McKinsey exec who was his friend from college. Kumar had given Raj a document in order to convince him to become a Mckinsey client.
On the steps outside the event, Raj pulled Kumar aside. He told Kumar, that is not the document I want. I want your inputs, rather than Mckinsey's. He offered to pay Kumar $500,000 per year for his information.
Source: Anil Kumar's testimony
In 2004, Raj vacationed with his family in Sri Lanka, Raj's native country. (Raj is said to own over 50% of the Sri Lankan exchange's market cap.)
On December 26th, a tsunami struck Sri Lanka, killing 230,000, the most killed by a tsunami in human history.
His family donated $5 million to tsunami victims.
April 2007: Raj makes $36 million in 3 days while relaxing in the Caribbean. Then it's off to France.
Between April 13 and 17 2007, Raj was vacationing in the Caribbean.
During his vacation, Raj directed Galleon Tech to reverse it's position on Intel. At first, the fund held a short position of ~1,150,000 shares of Intel common stock (worth ~$23.5 million). But then Rajiv Goel, an Intel executive and Raj's friend, heard that Intel would report earnings that were better than expected. So he told his employees to cover its entire short position in Intel common stock and to purchase ~1.72 million shares of Intel common stock (worth ~$36 million).
Later that year, Raj and his family traveled with Rajiv Goel's family to France.
Source: Rajiv Goel's testimony.
April 2008: Raj hits a Lehman brothers dinner party, then flies to party with Indian billionaires in San Francisco
On April 21, Raj met with Amin Lakhani of the famous Pakistani company, the Lakson Group.
Raj had dinner with Stuart O'Dell, the director of retirement investments for Intel, at a Lehman Brothers conference on April 28th in Orlando, Florida.
The two discussed a strategic partnership. Raj hoped O'Donnell would invest a portion of Intel's pension fund, $100 million, in Galleon.
On April 30 2008, Raj went to the AIF Gala (the American Indian Foundation), where he met with Mukesh Ambani from Reliance Industries.
Held at the Palace Hotel in San Francisco, the theme of the event that year was 'A Passage To India.' Ambani was the keynote speaker at the event. Rajat Gupta, a board member at Goldman Sachs at the time, was also there, as you can see in the photo above (he's on the far left).
From Mukesh, Raj learned that Reliance might be interested in AMD's fab technology.
Source: Transcript #524 and #521R
August 2008: Lunch with a Goldman board member, dinner at Nobu -- just a typical day for billionaire Raj!
On a Friday afternoon August 15, 2008, Raj went to lunch with Rajat Gupta, likely in Greenwich, CT.
'What I figured is that I would leave here around 2:30, after lunch with Rajat,' he told Anil Kumar, with whom he had plans to meet for dinner and drinks, on Friday August 15th.
'And then we would uh, you know, I would drive in and then I'd come to the office for a few minutes and then I walk to Nobu, right?'
Later that evening, he met Anil Kumar for dinner at Nobu.
Source: Transcript #553
In early September, Raj went to the US Open, where he saw Arun Sarin, the former CEO of Vodafone who had just stepped down in a shocking exit from in June. (Raj's house in Greenwich, CT has tennis courts.)
'I know that Arun was at the tennis, that's all I know, I don't know what the discussions were, you know,' Raj told Anil Kumar, who was trying to figure out Arun's involvement in a Telecom fund that Rajat Gupta and Parag were planning, on September 11th.
The next day, on September 12th, Raj flew to Hong Kong.
From there, he flew to Singapore, where Galleon had an office.
'And then from there I'm back to New York, I think, you know because markets are so crazy.'
Source: Transcript #616
In October, Raj returned to New York 'you know, because markets are so crazy,' as he told his friend, Anil Kumar.
Meanwhile, Kumar was partying with India's richest men in Montauk, NY, where Anand Mahindra has a home.
'I guess it's some suburb or something of New York,' Anil told Raj on the phone in September.
Mahindra is the Vice Chairman and Managing Director of Mahindra & Mahindra (his grandfather founded the company).
Important sidenote: When Rajat Gupta was charged by the SEC with insider trading (passing tips to Raj about Goldman Sachs, which he was on the board of at the time), Mahindra defended him on twitter. Click here to see the tweets >
Mahindra hosted a dinner for 50 at his house to discuss the future of India in October 2008. Mukesh Ambani, of the famous Ambani brothers, was there. He runs Reliance Industries, India's most valuable company. We wouldn't be surprised if Raj eventually got an invite to the dinner party, too. (But the call was minimized during the time the two discussed the party, so we can't be sure.)
Source: Transcript #616
2008: The Rajaratnam family travels to Europe with the Goels. First they drive around Italy, then it's off to London.
Raj and his family traveled to Europe with Rajiv Goel's family.
Raj had to get an Italian driver's licence so he could drive around Italy. (Rajiv already had his.) So he asked a woman named Anita (who is either his secretary or Rajat Gupta's wife, Anita, or perhaps both) to get him one.
After Italy, Raj and Rajiv went to London.
Source: Transcript #521R, Goel's testimony
October 2009: Raj brings a friend to his amazing condo in Miami, Florida for a vacation just days before he is arrested
Raj brought Anil Kumar to The Setai, where he has a condo in South Beach, Miami, in Florida.
On the beach one afternoon, Raj got a call. He walked down the beach to have a private conversation for about 5 or 10 minutes. When he came back, he was excited.
He told Kumar, I just got a call from a Cisco Systems executive. Cisco is buying a company called Starent.
Later that day, Raj told Kumar he was worried. You know Anil, I'm told that there's a gentleman who used to work for me and he's now wearing a wire. From now on when you call me, you should use pre-paid cell phones.
Days later, on October 16th 2009, Raj was arrested for insider trading.
Source: Anil Kumar's testimony
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