In the Raj insider trading trial yesterday, for the very first time, one of the Galleon’s chief’s former employees testified against him.
Smith talked about having been encouraged to “get the number” — concrete figures attached to earnings, gross margins, or pr icings of impending deals, before they were publicly released.
He also talked, for the first time, about Galleon’s use of expert networks and consultants to get inside information.
One example Smith gave to jurors was the case of Joe Liu. Liu was an analyst Smith recruited to Galleon, who allegedly used a source inside a company called Synaptics, to “get the number” Raj was looking for so he could trade ahead of big news that could send the stock surging or tumbling. That “led Rajaratnam to refer to Liu as “the ax” of Synaptics,” according to the NY Post.
Here, you can listen to one of Raj’s wiretapped conversations with Liu. These conversations are played in the courtroom almost every day, and are often the peak of the witness testimony. And of course, they offer an incredible insight into the world of hedge fund trading, and Galleon’s in particular.
Listen to the call: