The Financial Times (FT) among other news providers has covered the trial of Raj Rajaratnam, founder of Galleon Group, for alleged insider trading. One of the alleged incidents involved discussions of the details of Intel’s planned $1bn investment in wireless broadband company Clearwire the day after the chipmaker’s board approved the transaction and weeks before the deal was publicly announced, according to recordings of phone calls played at his trial.
For the full FT coverage, please click here.)
The calls were between Rajaratnam and Rajiv Goel, a former member of Intel’s treasury group, on March 20 2008, in which they discussed the deal terms. The day before, Intel’s board had approved the investment by Intel Capital, the firm’s investment arm, in a Sprint Nextel tie-up with Clearwire.
In one recording, heard in court and published by the FT, Goel asked: "Did you digest the information I gave you?"
Rajaratnam and Goel discussed Intel’s $1bn investment, the terms of the deal and names of other strategic investors, including Google and Comcast. They also discussed that Clearwire’s board would consist of 13 members. None of the information, an Intel executive testified, was publicly disclosed.
Goel, who prosecutors allege improperly tipped off Mr Rajaratnam about Intel earnings and the investment in Clearwire, has pleaded guilty.
Defence lawyers for Rajaratnam focused on several news articles and analyst reports in late 2007 and early 2008 that discussed the potential Sprint-Clearwire deal and Intel’s $1bn investment.
Terence Lynam, a lawyer for Mr Rajaratnam, asked: "This deal was all over the press?" The defence has maintained that Mr Rajaratnam made trades based on his own research and not inside information, the FT said.