Anil Kumar, one of the government’s star witnesses in the Raj Rajaratnam insider trading trial, is currently testifying inside the U.S District Courthouse.
Yesterday, the government told us about payments that Raj allegedly made to his friend and former McKinsey high-flier, for inside information on clients he worked with at McKinsey.
Today in the witness stand, Kumar described those payments and their agreement to share information.
Kumar describes an email he sent to Raj, proposing Mckinsey work with his hedge fund, Galleon back in the early 2000s. Raj rejected the offer twice. In those offers, no confidential, material information was exchanged, Kumar said.
The prosecution then asked Kumar if he gave confidential documents to Raj after 2004? “Yes,” Kumar responded.
According to Courtney Comstock, who is the courthouse for Clusterstock right now, Kumar looks very sad. “He looks like a dude in mourning. The artist in front of me is painting him with a frown,” she said. “He’s wearing a black tie and a black suit.” I just want to do everything I could to right the wrong that I committed, Kumar said. “That’s why I’m working with the government.”
Kumar also talked about his sick child, and about a housekeeper who he employed because of that child. We heard yesterday how that housekeeper would end up playing a part in the alleged insider trading conspiracy, and today Kumar talked about it.
He said Raj pulled him aside after a charity event and told him he didn’t want to work with McKinsey, but he did want to retain Kumar. “I have one million in soft dollars that I can use to pay you for research. $500,000 if you talk to me four to six times per year.”
In addition to the alleged quarterly payment system — which eventually became an annual payment based only on information that proved “valuable” — Raj wanted Kumar to reinvest that money with his hedge fund, Galleon.
Kumar says he said no — that it wasn’t allowed. Kumar said that Raj said, “well, get someone you know in India to consult and they can take the money.” Kumar said no — they dont allow that in India. That is allegedly when Raj introduced the idea of setting up an account in Kumar’s housekeeper’s name.
Kumar then described a letter that Raj wanted him to write, and back date to October 2003, because that was a date when Raj could accept new money into Galleon. Kumar said that Raj then recited the letter so that he could write it up, and then forge the housekeeper’s signature.
That letter said: “Please use this letter as your authorization to accept instructions from Anil Kumar on behalf of my account. In addition, please copy Mr. Anil on all correspondences.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.