Ex-McKinsey partner tells of tips in trial of Rajaratnam brother
By Nate Raymond
NEW YORK (Reuters) - A former McKinsey & Co partner whose testimony helped convict Raj Rajaratnam for insider trading returned to court on Thursday to testify against the Galleon Group founder's younger brother, Rengan Rajaratnam.
Anil Kumar, once a top partner at the elite consulting firm, told jurors in New York federal court that for years he leaked information to Raj Rajaratnam about his client Advanced Micro Devices Inc AMD.N, including a 2008 deal involving an Abu Dhabi fund.
"I had no business talking to him about AMD," Kumar said.
The testimony marked the second time this week jurors heard directly from someone who prosecutors say provided confidential information to the one-time hedge fund billionaire, who in turn allegedly gave it to Rengan Rajaratnam.
Prosecutors accuse Rengan Rajaratnam, 43, of conspiring with his brother to trade on illegal tips about AMD and Clearwire Corp in 2008. He has pleaded not guilty to three counts of conspiracy and securities fraud.
The AMD tip came after McKinsey was hired to advise the chip maker on spinning off its manufacturing business into a new entity. As part of the deal, later announced in October 2008, an Abu Dhabi state-owned company agreed to invest in both AMD and the new entity.
In an Aug. 15, 2008, recorded phone call played in court, Kumar told Raj Rajaratnam that "they've shaken hands" on a deal involving an investment of $6 billion to $8 billion.
About three hours later, Rengan Rajaratnam called his older brother, who told him "that AMD had a handshake with the ... the Arabs," according to another recording played in court. Continued...