'Rajaratnam bragged about insider info'
Indian-origin former Goldman Sachs director Rajat Gupta’s lawyers are seeking to show a jury in his insider trading trial that convicted hedge fund founder Raj Rajaratnam ‘exaggerated’ and ‘bragged’ about having sources of inside information. Gupta’s lawyer Gary Naftalis asked a former Galleon portfolio manager Michael Cardillo during cross-examination on Wednesday about the claims Rajaratnam and other Galleon traders made about their sources of illegal tips.
‘Were there others at Galleon who claimed to have sources of inside information that they did not have,’ Naftalis asked.
The prosecutors objected to this and US district Judge Jed Rakoff barred Cardillo from answering.
Naftalis reframed his question and asked, ‘At morning meetings with Raj Rajaratnam, did people talk about or exaggerate their sources of inside information from time to time,’ Naftalis asked.
‘There were rare occasions when it happened,’ Cardillo said.
Cardillo has pleaded guilty and is cooperating with prosecutors in the insider trading case. During his testimony, he has said he traded on the stock of Proctor and Gamble in 2009 after learning that Rajaratnam had a ‘guy’ on the company’s board.
Naftalis asked Cardillo if he had heard Rajaratnam, his brother R K Rajaratnam or other Galleon traders talk about sources of illegal tips about companies such as Kraft Foods or Chico’s FAS.