Rajiv Goel, the former Intel executive and Raj buddy turned-government witness, testified for about an hour yesterday.
His evidence was drowned out by the fact that Wall Street’s most famous CEO, Lloyd Blankfein, took the stand after him, but Rajiv revealed more intimate details about Raj’s trading methods and his jet-setter lifestyle pre-arrest.
Goel, in rimless glasses, a dark green sweater and grey suit, looked sad sitting in the stand, much like Anil Kumar before him.
“Did you inform Mr. Rajaratnam about Intel’s earning in the first quarter of 2007 before it was publicly announced?” the government asked.
“Yes,” Goel replied.
Goel testified that he spoke regularly with Raj about non-public information about Intel itself, and other firms with which Intel planned to become involved. In one example from April 2007, Goel called Raj six times to get a hold of him, to relay an update on quarterly earnings and an updated business outlook at Intel. Goel reached the Galleon chief on his cell; Raj was holidaying in the Caribbean at the time, and Goel was in the U.S. The news was released publicly by the company on April 17, 2007, several days after Goel allegedly tipped Raj.
Goel also testified that he had lied on an Intel non-disclosure policy he signed in 2007.
“That wasn’t the truth, was it,” the prosecutor said.
“No, it wasn’t.”
“Why?” the prosecutor asked.
“Because I’d already disclosed confidential information to Mr. Rajaratnam,” Goel said.
Oddly, Goel continued to called Raj, “Mr. Rajaratnam.” These two men, after all, weren’t business colleagues, they were friends — close friends who vacationed together. What else did you talk about, besides Intel, the government asked?
“A vacation that we were planning… our families were getting together,” Goel said.
The government showed jurors an email from Goel to Raj, dated May 22, 2007. It was about the pair’s impending summer vacation in France. Their families stayed at an 11-room country house called the Chateau Grimaldi. On the vacation, Raj said to his friend, “Either, he’s going to make me a lot of money or had made me a lot of money,” Goel told the court.
What was your reaction to that, a prosecutor asked Goel.
“I thanked him.. as any person would.”
Specifically, the friends were talking about the $78,000 Raj made for Goel in trading shares of Hilton Hotels before the public announcement of its acquisition by Blackstone.
The government showed confirmation records from Charles Schwab, showing that “Mr. Rajaratnam or someone working for him,” purchased 7,500 Hilton shares valued at approximately $264,000, then sold them three days later for slightly under $343,000.
“I found it a little strange it wasn’t a healthcare or tech stock” Goel added, because his friend typically didn’t trade in hospitality stock.
The Hilton tip is alleged to have come from a junior Moody’s analyst via Roomy Khan.
Business Insider Emails & Alerts
Site highlights each day to your inbox.