In a wiretap played today in the Raj Rajaratnam trial, we get a glimpse of Raj’s little brother losing it when the Wall Street Journal beats them to a story…Well, publishes that story before Rengan knows whether or not his brother purchased stock in the company that’s being covered.
On March 25, 2008, Rengan Rajaratnam calls Raj frantically:
Rengan: Oh dude, we’re f**ked.
Raj: Not too much. How you do?
Rengan: Good… We’re f**ked man
Rengan: It just hit the Wall Street Journal
Raj: What’s that?
Rengan: The Clearwire stuff.
Rengan: It’s all over the Wall Street Journal.
Raj: O.K. What price does it say?
Rengan: They’re (Sighs) they’re not… they’re short on details, but they kind of say, you know, they’re looking to raise as much as three billion, but the don’t have any of the equity split. But they named…
Raj: Uh huh.
Rengan: … Comcast, they named Time Warner, Clearwire, Sprint.
Raj: Ok. Shit.
Rengan: So I don’t know how much you got in today, but, I think… is gonna rip tomorrow.
There’s a reason the Galleon chief seemed less flustered by the story that his brother. One day earlier, on March 24, 2008, Galleon bought 125,800 shares of Clearwire.
The government alleges Raj bought the shares based on tips from his friend, Rajiv Goel. Two days after the purchase — one day after the WSJ story — the company’s stock surged and of course, Raj made a ton of cash.
Raj’s defence argued during cross-examination earlier this week that there was a significant amount of public speculation about the joint venture, and Intel’s investment in it, both by press and financial analysts.
The full transcript is below.