Embattled hedge funder Raj Rajaratnam “sometimes” asked for “pointed” information about Intel’s earnings, margins, and products from Rajiv Goel during their years-long friendship, according to Goel.
“He said he had a stellar reputation in terms of being able to predict the financial earnings of Intel,” said Goel. One time before 2000, Goel says, Raj got his “stellar” information about Intel’s sales from 2 employees. As a thank you gift, according to Goel, Raj gave them each keys to BMWs.
Goel says Raj also got “stellar” information from him. Goel admitted that he gave Raj information he had learned from a more senior exec about Intel’s quarterly earnings in April 2007.
Goel says he knew it was wrong to give the information to Raj, but did it anyway, “because Raj and I were close friends… He was a good man, we were friends. We helped each other out.”
Rajiv Goel’s reciprocal relationship with Raj
“We were good friends, so we helped each other out,” is how Goel explains why he gave inside information to Raj.
“We studied together at Wharton,” he told the court on Tuesday. “We kept in touch and our families went on vacations together.”
“We spoke frequently. We would talk about our worlds, his world a little, my world a little, our kids, our vacations together.”
He likened their trading stock info to helping each others kids getting into a good college.
“We helped each other with our kids, their colleges — that was another way of helping each other out.”
Another way Raj helped his friend Goel was financially.
Goel detailed three payments that he received from Raj over a few years that totaled ~$1.4 million (details on the transactions are here). One of those transactions was for $500,000, transferred to Goel’s account in Switzerland (created because Goel was “enchanted” with Swiss bank accounts) in 2006.
“Raj was a generous person,” says Goel, who explained that with the $500,000, Raj was helping Goel with a family issue.
Goel’s ageing father, who lived in India, had become sick, and the family wanted to keep his apartment after he passed away. Raj’s $500,000 gift (“I had never seen so much money,” says Goel) was intended to help Goel acquire the apartment.
Soon after the $500,000 was transferred into Goel’s account, the former Intel exec took $150,000 out.
Rats had infested the apartment. They ate the floor, and destroyed the property to the point that Goel needed the $150,000 for “extensive” repairs, he said.
Maybe Raj, who was scribbling notes during his friend’s testimony against him, wrote something like, “IRONY.”