AKIN GUMP

STRAUSS HAUER & FELDLLP

------- Attorneys at Law
The Honorable Richard J. Holwell
United States District Judge
Southern District of New York
500 Pearl Street
New York, New York 10022
December 16, 2009
Re: Modification of Bail Conditions
United States v. Rajaratnam and Chiesi
Docket No. 09 Cr. - (RJH)
Dear Judge Holwell:
JOHN M.DOWD
20288743861fax: 2028874288
jdowd@aklngump.com
We write on behalf of our client Raj Rajaratnam in the above-referenced matter, which we
understand was assigned to Your Honor yesterday and is currently scheduled for an initial
arraignment on Monday, December 21,2009 at 12:00 p.m. We write to request Your Honor' s
reconsideration of the terms ofMr. Rajaratnam's release on bail after completion of the
arraignment.
1
Procedural History
At Mr. Rajaratnam's initial presentment on October 16, 2009, Magistrate Judge Eaton granted
Mr. Rajaratnam's release upon his signature of a $100 million personal recognizance bond, co-
signed by five fmancially responsible persons and secured by $20 million in cash and/or other
assets.
2
At the bail hearing, the Government sought to have Mr. Rajaratnam detained despite the
facts that Mr. Rajaratnam (i) is an American citizen living in New York with his entire family
including his elderly parents, (ii) poses no danger whatsoever to the community and, (iii) to the
contrary, has been a vibrant and philanthropic resident of the New York area for decades.
In setting the bail, Magistrate Judge Eaton stated that the Court would revisit the terms of Mr.
Rajaratnam's release and reduce the personal recognizance bond if Mr. Rajaratnam cooperated
fully with his supervising Pre-Trial Services Officer. See Hearing Tr. (October 16, 2009) at 38:5
1
We sought the Government's consent to this request but have not received its response.
2
A copy of the Defendant's Appearance Bond with the conditions set at the October 16,
2009 hearing is attached at Exhibit A.
One Bryant Part< I New York, NY 10036 / 212.872. 1000 I fax: 212.872.1002 I www.akingump.com
AKIN GUMP
STRAUSS HAUER & FELD LLP
-----
The Honorable Richard J. Holwell
December 16, 2009
Page2
- 38: 10 (noting that, "frankly, if the pretrial officer reports that everything is going very well,
then I think it would be logical to return a bit of the money.")?
We learned subsequent to the initial presentment that the Government made numerous errors and
misleading arguments in the preliminary bail argument, operating from the fundamental
misimpression that Mr. Rajaratnam intended to flee, which he did not. Moreover, at the initial
presentment, the Government violated Title 18, United States Code, Section 25 18(9) in failing to
tum over the wiretap aprlications prior to using the wiretap intercepts to argue for Mr.
Rajaratnam's detention. We raised these issues, and the very restrictive travel limitations,
placed on Mr. Rajaratnam by letter dated October 29, 2008.
4
In a subsequent hearing before Magistrate Judge Katz on November 5, 2009 to relax the terms of
bail, including in particular, the very narrow travel restrictions placed on Mr. Rajaratnam,
Magistrate Judge Katz deferred to Magistrate Judge Eaton's sentiment at presentment, opting to
defer reconsideration until later. See Hearing Tr. (November 5, 2009) at 10:25 - 11:5 ("Judge
Eaton, as I recall, said two weeks ago that maybe in the end of November, if things are looking
OK, one way or the other, he might be willing to reconsider.").
5
Magistrate Judge Katz did,
however, relax the restrictions placed on Mr. Rajaratnam' s movements, permitting him to travel
within the forty-eight contiguous states.
6
Argument
Mr. Rajaratnam has fully complied with the terms of his release and has dutifully followed every
instruction from the Cowt and Pre-Trial Services Officer Santos. Accordingly, consistent with
Magistrate Judge Eaton's guidance, we respectfully request that Your Honor reduce Mr.
Rajaratnam's personal recognizance bond to $20 million and authorize the release of the $2.5
million cash posted by Mr. Rajaratnam. The Court should rest assured that Mr. Rajaratnam will
continue to be present for any and all court proceedings in this matter. Mr. Rajaratnam denies
2
A copy of the transcript from the October 16, 2009 bail hearing at the initial
presentment is attached at Exhibit B.
3
The Government effectively conceded its violation of the statute and produced the
wiretap applications subsequent to the presentment
4
A copy of a November 2, 2009letter to Magistrate Judge Katz enclosing the earlier
October 29, 2009 substantive submission is atta{;hed at Exhibit C.
5
A copy of the transcript from the November 5, 2009 hearing is attached at Exhibit D.
6
A copy of the Defendant's Modified Appearance Bond with conditions set at the
November 5, 2009 hearing is attached at Exhibit E.
AKIN GUMP
STRAUSS H AUER & FELDLLP
-----A!lomeysellaw
The Honorable Richard J. Holwell
December 16, 2009
Page 3
the Government's allegations and looks forward to clearing his name. Immediately following his
arrest and release on bail, Mr. Rajaratnam issued a document "hold" order for the Galleon offices
and had all paper shredders removed. He did so to ensure the preservation of all Galleon records
which he firmly believes will exonerate him, a concrete demonstration of his intent to defend
himself against the allegations contained in the Complaint. Since that time, Mr. Rajaratnam has
carefully worked with Galleon to wind down its business, to take care of the Galleon employees
negatively affected by the Government's sudden arrest of Mr. Rajaratnam and its related press
conferences, and to ensure that the fmancial interests of Galleon's investors were fully protected.
Despite these efforts, his bail, as currently constituted, carries the stigma of being the highest
such bail in recent memory, far exceeding the terms of release for Bernard Madoff after Mr.
Madof:rs admission of guilt. Accordingly, we respectfully submit that Mr. Rajaratnam's
complete cooperation and compliance with the terms of his release and instructions of the Pre-
Trial Services Office satisfy Your Honor's concerns and warrants the reduction of his bail.
In addition, several additional facts have emerged since the initial presentment before Magistrate
Judge Eaton which further support the reduction of Mr. Rajaratnam's bail. We have recently
confmned that the Government's disclosures to the Court in the Complaint contained serious,
material misrepresentations and omissions that call into question the Government's allegations
against Mr. Rajaratnam. The Government represented in the Complaint that "CW-1," now
known to be Roomy Khan, had begun cooperating with the Government only in November 2007
in hopes of receiving leniency in connection with an expected guilty plea to criminal charges.
See Complaint, 18, fh. 1.
7
The Government presumably made this representation in an attempt
to vouch for the reliability of Ms. Khan, whose purported information against Mr. Rajaratnam is
the centerpiece of the probable cause offered by the Government to the Court to gain judicial
approval for its wiretaps and to seek Mr. Rajaratnam's arrest.
The Government's disclosure with respect to Ms. Khan has proven to be both incorrect and
incomplete. Court records that were recently unsealed demonstrate Ms. Khan had been
previously convicted in 2002 of wire fraud and had specifically cooperating with the United
States Attorney's Office and the FBI against Mr. Rajaratnam well before that. We have also
learned, based on Ms. Khan's allocution during her plea of guilty to new fraud and obstruction of
justice charges on October 19, 2009, that Ms. Khan violated the terms of her prior "cooperation"
with the Government and the terms of her probation by engaging in additional criminal conduct
subsequent to her 2002 felony conviction.
Furthermore, the Government failed to disclose to the Court that the Government in fact found
no evidence that Mr. Rajaratnam traded on insider information allegedly provided by Ms. Khan
7
A copy of the Complaint is attached at Exhibit F.
AKIN GUMP
STRAUSS HAUER & FELDLLP
----- Attorneys at Law
The Honorable Richard J. Holwell
December 16, 2009
Page4
resulting from Ms. Khan's purported cooperation against Mr. Rajaratnam earlier this decade,
despite an "exhaustive analysis of the labyrinth of accounts associated with Galleon." ("Based
on information obtained to date, Rajaratnam cannot be tied to illegal insider trading connected to
the Intel infonnation. He also did not provide any monetary payment for the [Intel]
information.").
8
We respectfully submit that this exculpatory information would have been
relevant to the Court's consideration of the Government's request for an arrest warrant against
Mr. Rajaratnam and, at minimum, would have directly rebutted the Government's argument at
the bail hearing about the purported strength of its case.
Conclusion
For the reasons stated above, we respectfully request that Your Honor reduce Mr. Rajaratnam's
bail conditions to permit his release on a $20 million personal recognizance bond, co-signed by
five financially responsible persons and secured by Mr. Rajaratnam's personal property valued at
$17.5 million, which has already been pledged.
Thank you for Your Honor's consideration of this r
Enclosures
cc: Assistant United States Attorney Joshua Klein
Assistant United States Attorney Jonathan Street
Pre-Trial Services Officer Santos
8
United States' Sentencing Memorandum and Motion for Downward Departure, United
States v. Roomy Kahn (sic), CR-01-20029-JW (July 1, 2002) at 7:11-13. A copy of the
Sentencing Memorandum is attached at Exhibit G..
$I 00 MILLION PRB TO BE CO-SIGNED BY 5 FINANCIALLY RESPONSIBLE PERSON'S (DEFT'S WIFE AND 4
FINANCfALLY RESPONSIBLE CO-SIGNERS); SECURED BY $20 MILLION CASH/PROPERTY; TRAVEL LIMITED TO
NEW YORK ClTY UNTIL S20 MilLION CASH AND OR PROPERTY IS POSTED; AFfER IT IS POSTED, lHEN TRAVEL
I
LIMITED TO 110 MILES FROM MANHA IT AN; SURRENDER TRAVEL DOCUMENTS {&NO NEW APPLICATIONS);
" REGULAR PRETRIAL SUPERVISION; DEFI' TO BE RELEASED UPON TII.E SIGNA TIJRES OF DEFf; JUS WIFE ANP 4
OTHER CO-SIGNER; REMAINlNG CONDITIONS TO BE MET BY 10.00 AM TIIURSDA Y OCT 22, 2009
BAIL MODIFICATION ON 11/5/09 BY 0 '1111-
United States of America
v.
RAJ RAJARA TNAM'
Dqendant
Southern District of New York
)
)
)
)
)
Case No.
DEFENDA!Vf'S APPEARANCE BOND
To obtain the defendant's release, we jointly and severally agl'Ce to forfeit the following cash or other property to the United
States of America If this defendant fails to appear as reqwred for any court proceeding or for the service of any sentence imposed as may
be noticed or ordered by any court, or fails to comply WJth any conditions of release set by the court considering this matter (descrilu the
cash or other property and any claim. lien. mortgage, or other encumbrance on 11)
Ownership We declare under penalty of perjury that we are the sole owners of this property and !bat it is not subject to any
cla!Dl, lien, mortgage, or other encumbrance except as disclosed above. We prolillSe not to sell, mortgage, or otherwise encumber
the property, or do anything to reduce sts value while this agreement is in effect We deposit with the court the folloWing ownership
documents, including any encumbrance documents (list all doCUI1ll!nts and submit as auacltments)
Surety lnfonnation. We understand that the court and the United States of America will rely on the surety information in
approving this agreement
Conditions of Release. We state that we have either read aU court-ordered conditions of release unposed on the defendant
or bad them explained to us.
Continuing Agreement. Unless the court orders otherwise, this agreement remains in effect during any appeal or other
1evsew until the defendant has satisfied all court notices, orders, and conditions.
ExoMratton of sureties. This agreement is satisfied and ends if the defendant is exonerated on all charges or, if convicted,
the defendant reports to serve any sentence imposed.
Forfeiture. If the defendant fails to obey all conditions of release, court notices, a.od orders to appear, the court will
immediately order the property forfeited a.od on motion of the Umted States of Amenca may order a judgment of forfeiture against
the signing parties and thetr representatives, jointly and severally, including mterest and costs.
ETC
1 UNITED STATES DISTRICT COURT
2 SOUTHERN DISTRICT OF NEW YORK
3 ------------------------------x
4 UNITED STATES OF AMERICA
5 DOCKET NO .: M-09-2306
6 - vs-
7
8 RAJ RAJARATNAM, et al . ,
9 Defendants
New York, New York
October 16, 2009
10 ---------------- ------- ----- --x
11 TRANSCRIPT OF CRIMINAL CAUSE FOR PRESENTMENT
12 BEFORE THE HONORABLE DOUGLAS F . EATON
13 UNITED STATES MAGISTRATE JUDGE
14
A p p E A R A N C E
15 For the Government :
16
17
18
19
20
21 For the Defendants
22 For Raj Rajaratnam:
23
24
25
26
27 Audio Operator :
S:
JOSHUA I. KLEIN, ESQ .
ANDREW MICHAELSON, ESQ .
JONATHAN R. STREETER, ESQ.
U. S. Attorney ' s Office
One St . Andrew ' s Plaza
New York , NY 10007
JIM WALDEN, ESQ.
La SHANN DeARCY, ESQ .
Gibson Dunn & Crutcher LLP
200 Park Avenue, 20th Floor
New York, NY 10166
No Audio Operator
28 Proceedings Recorded by Electronic Sound Recording
29 Transcr ipt Pr oduced by Transcription Service
1
30 ---------------------------------------------------- - - ---------
31 KRISTIN M. RUSIN
32 217 Pine Meadows Ci rcle
33 Hickory NC 28601
34 kmrusin@earthlink . net
ADDITIONAL APPEARANCES
2 For the Defendants
3 For Anil Kumar :
4
5
6
ISABELLE A. KIRSHNER, ESQ.
Clayman & Rosenberg
305 Madi son Avenue, Suite 1301
New York, NY 10165
2
Tt COOPT: Al l rt(Jt"t tra <.all1n9 ccse oC
2 United '1'tateG ac;ainst Rot.j Ra.j.u:atl"' l\tli and An1l fol\lrnar. Soch
.:J qentlcmen ht:!'O. in court .
J ..rill ,..c-w j:k t :t'e ac t. orneya to 'er.ter t}:.eir
s. .appe.nancea Of\ tbe record
hA. JCUIN: .Joshua Klein on bcltalt D f tfl-e Govert\IMnt
a Streeter* al.1u un o f the Govetn:'l\eot Good a-fcern<tOn,
i YOilr. HOI'II,)I

t liE COUtU 1\nd for Hr . Rajatlt.l'la"-1
I'A J : m Walcfon "d t..a&hann D9Arcy. o C Gibsol\
lt'K t"OOR'l. And for- A"&l tc:wut>l
"
Ht l<let n. t.n two dofeod.a.nts
l t t a.ro\tnd tho .,..,IMI tlM, sJ.:x e.m. this 1110rninq
TM!. COURT ftY ni!M JUdge Ei:ton. t
thict.y-toux type:vr1tten eoplnt d:e
'l GO\terMent a l.aq tJ at yoJ- eontpJ.recs WJ.th eacl'l o t he r com1t
l want t.o l!IArn ttl!:;b of yo\1 'that: you a re not req uired
! stoc .. ent. or tl'tat do ln th of t he
12 far ?
..
of you " t.t!e dt.so)-ute rtqht. t.o
11 e.aploy .-l.cocneya ot yo.Jr o;r.on ana 1 ::oee t h.at you have
11 done tht tody lf at ny timt .in t.ha tutur e you become
,, financially wn blo to cont!.nue vi:th 1 ptlVItely r etai :-erl
2J) vou have the riqhc. to file f t na nc1 al
2'1 a.t!'1davi.t tt1th the judqe to requet t)\ )ud9'e t.o an
n ttorny tor yo\:r fr-ee: ot cl\arg CrO"l tha t point on
.. t.ct'l of you n.._s Ue rlt;hc. co a prelun.nory heann9
qrend to vote a.n ifldl etn\cmt against you Tt'lat h not
3 yet . o I "n ..U Ht a_ dal e to.c 90\0t \I:.J.Al
" h6iitru1q
'Nh'i't: i & th Go"ernunt .$ po3lt.10'l on b.t. lll
M!\ l(L..EHI 'l'<hU konor . to
1 R.a j at:ttw!D.- tt:e Gov,n.e"' t dk.s det-ent.t.on. u1cS t 11 t>e
t handhnq the ball procdlrtqs rel.atln<; to M.t Pj ratrlm.
IS m . STJI.lETT.I' : Abso lute- ly, 'touc Honor fhe
,. that. we propos e tO Yo\lr tionor i S a ft ve - rn.ll 110"-dolla.r persona l
t7 tPGoqnuaTICil bond 1.tql\od by tho hit vtte. an<l hl3
" aons by h.1a home ed 1n Ca. H!orn1o. wh1.cl\ i a
:. .h ooly .-ortqaqe. ao th t-wo
tl 1t1111Gn o<>l h.ra ln eq"Vlt.y rovqbly. v-o\lld t.h bond.
22' aucrende-r of all traYe l travel ratrtct.d to the
23 continent.al. UnJted States ; tt:CJU.I.ar pretril .JUporVlblorq and
Chit. defendant LoUl<S be c e l eascd t oday on h{o own hi s
(111!o-cnia. w.J.U .s t.qn a bond 1n Cal1for-nta
M$ K!P.SflNZ:R fes. thj,t u - .. JUit tor Lf\e c&cord ,
' Judqe. t-he .aqent & aeJJe4 lit t\.umar s pas.sport t lu so
1 C.hey A- lreo-ay tave t hat. .
10 bond. . All .r igt1t ,
,,
11 bout d.at.e for a po1.tnt1al pre.h.m.ir,ary htar).nq"
"
MS . !l:lP-Shti[Jl! Yotjt' .Honor . 'fe'll vuve to the
,_. Lhut.Let.h d a.y .
..
..
17 Kt' 1<u.Nr. in toueh "'lth atto.rney.
11 These preh.Minary fHtarl nq da te: a.re v-.ry Often adjourned, a nd
lt you c.1.n sa.V your.self 1 needles.s trjp t o r:ourt 1t you l ean\ o!
20 new adJ ourned date. All l'lqht
and Clcfetldant '.s on by October 26t h .
M..., . STR::trtl\: T "lt. s Yovx Jl.onor .
COURl You ra not hlnq to co.st cah,
2 tNt. you are beir.q ttquired to oost pco.,.rty \.tltt\ a.n ot
3 two (llllhan Clollar.5. Tf\e tcvl .u 901n9 to be re$Uic:tE"l t.o
th eonU.I'lent..l Unt.t.eCl Stteo. \ft\1e:h l thl.nl( .9hculd e.x-:.loJde
1 and a l so Al3&k.l.1 ,bul,. to th - WhAt wo usot.d to 1 \l'e
6 old forty-eight. Okav
l ' m cbecl!inl) 'box lh.et qvote, Scvrn:nder
t travel docutDer.,._ s and m no ne-w IPPltc&ttun. You've alxeady
t ..,rt:eMerftd tha p..ssport It vou\d be lol.,tton of yuur bSl
tO canchtlona. i f you .,.re to ttet'lpt. to acqun:e o ct
H 1riod or. _ndged. '-0 bUy bUs t.Jc.ke:., oc t.rain or
t l a. pJa.ne tlc.}f;et. th.aL vo.Jtd td,e you &td64: tM forty-et-qht.
U atatea. Ju.st att.e.-pt.1'1'9 to do t.bet. "a-uld aubJect you to r.--
1( rr.at for v1ol&t...i.nq )'0\JI"" bu.l condlt.ions
,,
,,
"
Mr . l think .sald requtac pretr i a l
N!ol. S1 REETERo lhlt' t coer oct, Your Honor.
Tio!::t CoVH.1: And the prttt".taJ. sc-vlces otticer hece
11 if111 C-lo.p1Un al.l ot t.ho1r .a:ul r:qula.r pcetrhl
:0 .tUFt.,lSl("f\
MS . K!RSI-,.ER; t'e reldel ln C.1it:Ornt.a . Juac:a. so-
B On" o! U exp!an.et1ons J u:. lrl. ";.hey vUl
U q1ve fOU l.S tlot they wtl t q1ve you ti':'e telephone nu..ber ot
24 ao:N u.s. probation -- pz:etr1l r".a.C-' oUic.or \II Ci:11tcnu
26 who .. .as a to w1ll cio the dar-to--day
t1R S'rtt.tJt: t'ht ol'\lV otl\r feature, roue Aonor.
)Uat. to be clear &bout. h. the hous dooa t'lot need to be.
.t pDitcd untu Len oh-t'l\1\1 weJJ..
TK' COURT Ye Wc 'ust:. about o.ett 1nq co that
6 1'"11 Ulc.kin9 box t!'ot ti)'IJ '-hl df.e-ndant 't to be releaaoo
1 upon lhe tollo ... ...nq co"<SitJon. U()nuure.a ot detenda.m. al"!d M.t
t vs.!e rEAoU-o.lnq cond.itJ.ona ue to be c.et b)' Cetcbc..c .26
lord ,. .., t"' t vor1r.a 'J 'o\1 t:ave- to ::.Ofroe here at
tO ttr. on Oc:.ober 26tb.. ..;.n.tn you .. !or au:: tba!: your
H s.on J'a' co-siqne:d. t.ht ooncS ano yol.)r prop.en.y a.n eqult}l of
12 two 1'11:11U.oo dolla..c.s 1-.as pon.ed H you 11.-no"' t.hat
u atue, then you don't. have to COtl\e hre on Oetobe:- 26t.h aut.
1-4 u.oltirs 5 there been an 9reamont to som-e $O:t of 1\
1.l aO)OUrnt\$1\t., you' 11 .t\av to ocrne hor, There' l.J. be a di fferent
11 judqe on ancs h vUl hvor wh41t.ever
11 t..heca- t tor pe.rh..tps dctdltne of 26
,.
r t.hick that. Lt wn.h tfr KuJt:", &.nd 'JO Ht
tt J.e;,ris v1.ll take z.his d.Japoeltlcn sheet ::o tll tOOft ne.xt. door so
If th-ey c..an :sta.=t. t.')'PJ.ng th per-onal bond. And
Jl 5000 es t.ht. is s.a.g-ned by ttle otndanl and h1s Vl.fe. :here .. y
n tK! a last.-.seconc chect. by tne J.s Nr.shl.,, &na the-re stwuld
2:1 qulclt cocfe:--ence \ol1th tt- pret.t"tJ urvlces o!ticer Jbol.l't
t>4 the rul<t:l to:: .:e9uli..r 1\Jpctvl)on thiink :ou. .All
<n <19M.
w IIO'W4 oo lo req l'.t.t for
2 detent ..on. a.s lo t-'..r l1Utn:ur.. l'll }lear- Lrst tz'OM: Lh
'l C-overomont enG the I'll t':e-.t: .,aldt!n.
)'IR I<L&IH: 1l'lan.K yot.J, Your Sono.r. Wo hav q1av
. ..-o. tn thh C&llf &bout !li(Jht tlSk a l so kaue orne
6 conCQa:ns lk>'o>Vt danqcu to t.l-_o c.omrnunuy , but tho:e ccmctn do
7 not cua to the lovel *' 'fO\J 1.h.e speciCic- 11#>-CV
a signt.f leeot C'uf'"ttTn "'e hMe abQut !11.:;1\t. cult
'
Our lllanatet h.o"l'l bas1e ffctors . One.
10 th.1s ts .a. deran.dan:. \tt'IO l"u. an t.nOCWIO\JI u\c:nt.tv
u w flu q\Ven :to- .'-' !c.cinq. and l'll tlk l'lo.c .bou.'-
t2 that:. '" minute,
13
u bo,tl avt an J.ncliflatJ.on co tlo4
rs ).nd. ... t.l'1u !.f! a d.ofendant. ""ho cl.tly hi $ th
,6 vhee..,uh L to tl
17

\ih.th .co.cpoct to :Ht Jncent1.ve t'O tlee, thl.o h a
who -' "ov, on tho c:.ol'll"ph1nt tt'lilt was
11 f1le.d, !&-etnq very siqntetca!'\t. .sa.nct1ons if he convl.Ct4d
zo Th.15 1.s .an lnudet t.r.ad1nq CU 1.11 '\ifb.l.c.h tJooe tJUldeHnea ate
21 f'JUld.oci \)y lht' .ount. of qa.l.n
Tn .lfo!IJ0\1nt. ot qa1n t.ere 1s tventy el.lhon coUata. as
23 .. In "'""'111M Al:d woula jala
:.- u1nqc ot Ppt'Oltl.,....t.ely n.1ret.y-sevcn lc a h.u'l'dr4!:d nd
2S That.'s "'ttY a.J.(!If'lificnt sentence* Po!lltt.tc1tla.tly e:or
10
.sorteone vho, J bel14tVe. u in hls- titties. earl; ft!U.et
HO: o 10. tne ltVlderce that \ole have c:znn1t Hr
3 lta J iil'ralnat'tl i, QVOtwhe.lnlinQ l}'le compht.nt. 1dentttae 1\ulf\e.tous
4 c:onvttA\.lOna 1n th.e poAaeaton there
S Ltn prepared to provide rltntive
c to:st-l.lf!cny &Q'.t\1\U, Hr . 1\a),uatne.m. Md. we ttlcphono and
7 c.hn. "rrobo.tl.tf: "'ecy sttol\gly l..he dltect
evldl\ce thet ..,. t.."' aqal.nst. t..he defe-ndant
1 alao )O.Jt. '-J\t to note with teapect t.o tht typ. ot
tO eonduGt c.-p1cttU ln the atrerrqtb ht-c) .-nd t.bt O\te:vhllnq
11 st.rength o! th ev1csnce .i n thee c.ora,pla1nt. thr are
11 nu>11eroua eonvere&tJ.o.n thtt ate re.::oroed that ver:y clearLy
'" de p.t c:t the t:c: tht tll.J.s t.n ved,tlblt
,,. ot ntdr Lrl.dl.f'Vil t&ctics
He' JQII\Obody th1t traded o.n !:he of
' ' R ;.raded en th bl.$1..1 of vnt\1rea . tie
n t..ra-ded on the bai ot inlonwt1.on to urn1.1\q"
ta announrernent.. lit t.racH:d on the- -- rath6t. h v:>\lld N'te
1t trades by t:alunq ehott poaitloa..a, by tAX1.ft9 ... c.nq J)C>IIit.;.otla H
20 orould n9aq \f\ P"'-t.l:.eT" of t.radinq c.hat v.a.a lntende4 a.o Male
?1 h:l.S 1119"1 t1:1vu.y
2J eon.t"t.lons a:tpic.teo. \!"\ th <::oqtlatnt. PilrtlctJlarly th
2A ronvec.sattona dpie:.ted i.n tne - - l.n the reeor<1..1nqa.
2S I.-hot. thh was -- OV@tWto.elrcunqly t.h.a.t thu Will
ll
intent.iona l , wil l fol
Tbe.re ' .s a eonver S-at ion de p l et-ed between the d.tendant
l nd OanJe)tQ Chiesl, 8 CO .. COJ"SpJ..a:a.lor . ! b<>l l CVG Cl'-.at Jn the
R3ja'Catnafll c oJ!op! :t1nt sne' .!: identlfied 4\ S C. C. One . Bu:; s he i s
5 iclel')tified in a s e pcrate com:olaint tht tho tiled
today.
Uut lh91 e 1s c t\e for e:.-ampl e, i n Nhi ch
8 Mr. Rajuatna.n Ha . t.&llc ioq about a.
s comp a ny in whieh the Governrnt:l')t t h ere vas t n$Jdet
10 crac:linq, a nd the y both ag.teed that there ' s a ne-ed to be. quote.
11 radio silent
tbere'3 c onversat 1.on b e't.ve e n Mr . Ri! J art n am
1J and Mr , 10 whl.Ch they talk about checkinq into .sOli\
15 t'he COO f or lunc:h -- or f e r lun-:h. next f'r iday, and
16 says I don ' t Wbn':. ar-yb,:,Qy eh.e to T<ake money on tins, bec.u.1se !
1t t u.s qet 1!'1 t roubl e for a lot ol
20 t:'1eto' s anothet CAll i n which M.s . Chiei tells
21 With ::- e .spect to a p a z tiC\llac involvln9
22 laM and AMD tht be t-weeo -- quote:
!S

'P.Y quy and youx 9uy, we can na1l. lf
ISM and who ' s in bed '-'ith tEiW? cny f- ing
the t icke t . "
3 thbt. tnake it clear tl\at t. ru.s oe!enda nt c nljJaged 1n the dl.u9ed
conduc t int e nt l.o-na lly and "l.llfulJ.y, a.nd. we .beliv the
e vide nce o-f t nat l S ove r'lb.e lmir .q.
wa would a. l s o not e for the Co\J rt t. ba t. 1-'.t'.
1 IY Ja r a t naftl f ace 5 very sub.st <t ntl.l bas<td on tl\e
e conduct alleged in tl\e compla1ot lone, that u onl \ a pot t ).or.
9 of t. -he e vidence t.hat t he Governme nt hs '-Hth to Mt:
10 we have ev:tdence t b.a. t - i n the f cxm of addit i onal
11 reeord.i nqs that- he en9e9e<1 ilnel u.t.ep,pted t o enq.age ln
t2 addit tonal insider t r a d il'lg tolatig to ado.itiontal co..'l' .panie s ,
t3 tha t: he a. t t etn? ':ed co en gage 1n in.s ider with ,o,Qdnional
p er-son$ :bosides tho.se x:etortl:nceod dil.ectly 1. n t .he

So : n word.s. the COnJPl&.1ht does not. depict t he .
11 .know:s lhat:, a nd th t c reate:; yet a 9.t.'eaec:u to tl e-.e .
Ard )c.st t o gave Your Honer 1 s en$e of What l 'o:;
.2Q eo'11pa ny cal l e d Span.s.t or- , a!'.d there WAS " propo.se-cl t.nnsact io!'l
J1 .celatin9 t o t hat t:O.Cit cddl'l ' t go tol'Wb:td, and W'tt ot.
n rec ordi.nq of Mr , Ra)aratr.am apoakinq with ether at GJ: J. leon
Z3 a bout t he tra r.$a ction.
).!"d 1n t.be (:'O-\Jr.se o! the col'lv-ersit:t.. on, Mr . RaJa r atnaro
2b .t s c ouna:el111g h l & co-l!e&gue.s el::>oo..: t. the best t.o avoJ.d
ll
1 detec t i o11 of in.uder trading , ar.d he talk ahc.ut the (aet that.
t t:he Wlly to- do tbat 1 :o to creat e an o-Lllall ttait , as s entiall.y,
J that lndicate'l that t.here u soro\l Qth4l' bJ.th the
4 inside i n!ot.or.a.tioo to trade in tl--e s t cc\ , Al'ld he $4id that.
o;ou know, could do this, 1\lOte, jost. .... .io that ju.st
' pcotect '""e j,;st tlave e J:t,dl t t: ail.
r wou l d also just Cor t})e Courl that my
t. is t. )'lat t he defe'ldant dot;t nQ:: have a prior
9 c r udnal hi stor y. tloweve:r, tho compli>iot -alleql'$ ..,ha.t we
10 .beheve t o be. e q!'eq! OUS crim.ioa.l eond\lC't. dating back to
\ 1 coruinuing a l l tho way U\\.o 2009, conduct th.at occurred on
U p-eu;istent , conce rtt:ld. repeated basi\ . .\nd. we t-ave spoke n wn h
13 c oope r ac tnq Wltr.csses who hAVe indicat!!d that the y have a lonq
u. history of enqaginq in ln:lide! tta<1i ng 'lfltll. t'1J: Ra jaratnarn
IS So while t his 1s one c()mpl3il\t 6l.l.e9'itV1J in$id.er-
16 t rading-rol<HOd crimil"'a\ activicy, it 1s alleqi.nq o scope
11 ot eond\:t;:t the: spanne d o any y caxs, .!lnd w(! J.dditionl
ta 1.ntora1at ion ind i catin9 t h at the f :.nd.oct: clnd its
1t durn. ion eve n qre.at er tl'oan tnat .
t he point ot 11\Y r e ferenclnq inforratlon. t t:a t 's not.
2t the compl a int is t b. t as t 'he seve.r: ity of the sanction'
22 t ha t Hr f ace .:; creates an tne.entl\l'e to flee, that.
23 incentive ts aaqni fted, we by the tact
?.t t hat t h.e r-c .. - by the fact tht h k.no-4$ thJ-t tt'lere m.ay 'lfoll
'25 roore comJ ng .
r a lso wa nt to foc us on tbe f act t hat we believe the
2 del'e nd9nt has .3 .stt onq t:.o fle e . And, what 1 r!'lei.n by
3 t.h.a t. is lle's i nc e.ntl.Vi 2ad t o flee by the s everi.ty o! the
$llnction., he a.nd b.y the overwhelJtdnq n a.tu::c of t:he
$ Govo"tnment .s cv idonet:, but. he ' $ t.o we
4 believe , &$ den'oost.tcn. ed by s peci flc n at. l)re ot the conduct
1 he .s i n .
t.hat. erect11u: veory st gni f l cant cor.cer n on our patt t.hat he .... ould
tG not have a Pi9 p.tobl em f lout.t.ng t he law and fleea.nq .1n th
tace of ball packa.qe. And. I JUs t " ant t. o -tocus on a t e-.:
t2 th1n9s 1.!1th re3p6ct to that point , Your
I t htnlc. that t his 1$ a n 1ndi.vidual w-ho, on t he one
1.S c o:Mun.lt y , intoracts witb lftilf\Y ll'el!'lb!!.r.s of the busines s
16 e s t abl t shment., 1ncl ud1nq the most people :ilt a host of
17 Y.o:nune 500 com.parues . hect9c funds, Will itroct fi r i!!.!o , &t.
Ill cetera. There are news l.ndi ciltl.nc;i hJs
1!1 ith, yQV Xnov, cetta.in char1tcble c a uses a11d ot.hot tbt nq.s . and
a l l of t hat paint .s a pu::t\l..re ot ,o:nebody who h a tespe ct. abl e
zt of t t:._e business eorMu.:mity.
22 '1 S f litt ly c<mtredJ.cted b'y the na tur e ot the
23 con<Juct that he " s engaged S..o. And by that, I
24 in..sio.e r t ha t U')Vo l ved not only tradiflg en
25 t he. basis o f 1ns 1de i nformation but Aho OnS1$tfmt. endeavor a
1 to rak !-f\stdet tx.-dtrq
T!:: e ra i..s vi-:isonee t)\at. th1 a o!ei'KI"nt., toe
had d1SCU!S10r.:!J Ab4U1. bCt.h tC"9 nd .sl':-orl posit. lr:m& lP
pat:: leu lac stock lit was b'Jt.&.d1nQ tip a long positlon, ot
t'hare ...,._, ,an tnt.e-nt. to build \lp ' shot't postt ion, so that 1t
t wo,Jld be much harder for ... Covoxnmont to dotc.t. that sot't of
ac.t,1vity on Ute basis o! a tov1ew ot tt"odtnq
1 tc:orda. and. t.b-e of c: .. v\.denc:e '-1'\t.
t Gove.rnnent comes t r\tO posla,a1on of wJt-1'1 r4tpecc 1:0
11 tny are 'ltnoN.:ng-ly ..nqaqtnc; ln e:oruti.)et. t.het 1.s C:UII.lne.l, and
1 t.he pauun o! conduct. ovet Ll\ relatitu; 1..0 Ll"e .t. ns i d-et
& tcdinq t..he de!enrtf-nt. naa el'\;agod 1n a starkly diftettl"'\.
t6 port..l"ilit than Lhe po.:t1:dt plr,t:ed by aol"t. o f l.toe out.e t'" hc:e ot:
'' tho defendant. ' & 1.n t.he .bu1tte.:u c ornmuntty, ln
t1 cl\1-.citbJ.ff t. c:etora.
,,
And. you know, there' 1 cU tn vbich ...... and 1
M bt!lleve T.t!at. th:t. s ;u not 1n th c;o't!p Lint, out th-e.t:e s ., call
lt tltAt. tu.nd ef u:bodiea point tht 1:he defendant hi
u Uve h.hocd by ln LnUdea: trcS1tHJ
!here's eorwersation tMt. ve .Ln -.tucb t.he
14 de!and&nt. i s to n indl.v1du6l bout a coo:pany -:ha t. u.
1$ I'IOt J.dnt tn lht- cOCtpll...int, 61'\d tt\e 1ndivtdul ts tUu.nq
to tl': ct tendant cbo.ut wht)\er r:tr not ha eah get a JCb wit.h th-e
2 dt!endant.. And yod It nov, there J a d11C1J&.s1on about you go ar'\d
you do your thlnq proper l.l/1 nd you tell rf'C all o f the
1 .t.ntorm;atton there
1 by oay1ng- t tht nd ot the dY l.t\t a wt'l&t us
aucces..sfu L r-:li!l"' t. tJ-at " r-ave a Kolodex. you kno" you JU-St
1 C-1.11 , .ca.ll, cell, nqht.l
And -:;h.ls aq1n vetl to the contrast. bet.wee.n outu
p1cc.ure t.hu Galleon technol09 w bu1lt. on funoAII'!:ei\Ul
10 analysis, whtch 1 s a. te:r-a rel attl\9 t.o tha a.oalysi.s of COI'.IPi'.nies
11 thAt fCC\J5es on -:.heir r.d their and the
12 inner truth ot lolbat 901nq on. Wblch was th1s- was
u t1.1nda111n1..lly thievery of l nu.de l-ntcrm.at l.Ofl .
"W!tl: to tho detendAfl\.
1
6 whecewttt,al t.o Cleo.
16 t.h.t.s ia a p er.son 1orh0 ha very cltP ond 1fery broad 1n:::e:rnatJ.ona .i
16 t.t Tl'lt$ 16 $Om4lone -who i e .S 1 L.anlren e1t1.2e-n , i n adct1t.SQ"'
11 t.o belng a 1..1 S e1then. pcopctrt"y ln Sn.
It holds .a broke..raqe account in Srl t.ankA . M eontrols thro\tqh
t t b:rckerge a.ccOt.mt. Uve pereeot: of one o( the
:0 S..tJ Lah):.a_n c-or..qloe.rt : Mb" tl" la.roen eongLlmerate
21 h.sted on tbe Col.._l':lbo sc.cc:\. exd'oanq Ana in effect.. has tot
221 li.!e ln Sri LaDka t:b&t vut1n9 tor J\tl!l shotJlc1 'he chooa to
?J !lee fl:.s als-O 90t tn ,..any ot.her eountr1es w
2 believe he's qot pre:pert .HU n !.nqllnel .1.n roronto. aJ'Id. UL
S.&.n9apore .
In a6dn. 1on t:o ra..at. . 1.s s.-..'boclv 4"'0 n
z txt-?rut\1 .ac:hedule tie travels Jhro.ad on fte'-f\IIOt. "-d
3 cl.!qulac hll.:tl$. ln oC!ect. Lhi s 1s vto, c.'nouqb "O
1tvee io "''" fc)J I'. l3 oaateaJly, by Vtt."tue of hi,. I.IPal t.h. nd
s .by virtu ot &b-road , and by Vir;t.Ua o ! hla
j ntert't l.O'lal c:ontc-tt, 1:1 Xltlly a z.en tho vor: ld. Md
1 tbat. coupla wlth tl' O'-rtec thinqs c..r.at I menti.onec1 bGu\. tho
a $11ct1on:; h't f&canq t'll..S lncent1.ve to - hi 1ncUr'\At1on
9 t:o flee jut htqht n our coneern
10
u u.s c<mces: n it '..h&t th4 pTec.r1al .sc-rvic6.t ldnt.iUes
'' -- "ell, lt 11!'-t \tf""J) bRett (oz a s.-ec.onc:a . Not on1y does
u "ha-... t-road .n.Q ceep lnt.err.at!o[\al t i e--' -- and 1 n"q:lctd to
1C say tt al.so datet", I .. ho's li"'1n9 1n Sout.t'l
15 AfrJc.a, net w c b,J.oualt don'L. kr.ow the: Cull o! nl.l
l6 .tnter.nat\onal 1:i0a
But. t.n adau.ton to that, thl.s .l.S who' qot
11 aJaetJ He' a t. le-as t. on pubHc aourc.
19 r e 5 'tO be on tl'le Forbes 400 list. l bl1.v n\i!N)e:r
20 tvo hun<lrct at'd tt1rtyI!X or :!OtM-tt::1ng alol\9 Ur.e.s.
!t he "s reportd wort pptox.ltt.on.ely on point. tlv tn.lUon
n dollcs And 1 V4Ula that. '/C".l a.f a t. th-e
l) p-retriAl aervics 1t:dicAttts t.otl assets of t vo
1:4 hundl:cd mJlllOn dollar
A.qain. wet ) U8ot weve ipproxl Jfll.tely len
ll
1 acc:oul\t.t that the detenlin"t naa tfoat contail"' t.welve
t dollu.s, Which !J rot. even a P'l!!t"e pJ..t.tanee of ln.a
repo.ct;.Qd t.ltOt' Tllo tact. that. we don'"L knov wneto Al 1 o!
t he.se ate. and ti'le fae-t. of thl.4 dJ.screpancy between
S ptet.rbl tport nd -- the repor:-tea intorrwtlon tn
6 the publ ic d-Of'\4i n )ut our concern
hi COVIU: All riqht I'll h-eer tc011 th cseteruo
tiR, T..,__.nJt you, Honor I a l ways believe
9 'the" l ttrt t should aqree Cf ao.,raAty
to t l.._at t.n J>"rl.., nd ther o""e tbinq h9 $.id U.t J vr
n With, -.nd. that U th\. 11r. 1\Ajl:tilUIUl 1s "ltlrlb4r ot
12 the
II
,,. \.n Lh.l. l l.ypo ol proeattdi.nq, & $ qt'ave a& thu 1a,
IS youce fed.:-ai pnaecutor nd you s.t.and boe,or a eoul't. a.nd
,, ask tt.at vt'lo l'tli qi11&n million dol l ara t.o
f7 ch1rity \n the l1a;. ttv yeara -- wbieh, by the Y ta the
11 st..ae &ii!Ount. 1.htt they al!eqe he !T.-.de tl\touoh tJua
., -- 1 hope t.ttat yow qet yot;<t Cc-t..s riq:'l--c. vhe.o you aay t)H.nts
20 lUte ""-11. ve. ltal h he !I l'un: or there, tt.c.auae
ll tt s not. uueJ we b.li"' t e tt_a a :S{$ter .ll*./l.nQ U\ $<;utt\
2:2 ktri c: , bec:use Jt _. not true.
'fout Honor, )'OIJ'Ye be>e..n en t.he bencb tor a lonq t:lf'fle
2 u 1- slJ'I\plt uuder trlOlnq c1se wnece, over the c:outa of
2$ three ot tour yer, lhey ve got su. o.r !Seven 'ti)Cirr.l; 1.1'10 thoy
bel\ve t .bey l oaV4 avl.d.,c bu;ed on two t hin.ga - one ,
2 coopert.L\q otiLtncss who' 1 coor1:t1nq to1
loat \.0 )'n, bC.S A9iOod tO plO'<l 9U.&} .. y- od\Cite\.et' \.ht
19
t x .. na, a nd to appueot ly haan"t don St. and \t\e$-
s whero ll!'l qe.nt h s 3. un.1er i pt ot
1 conv-ersat.lon thee. l.I'IC"l\tde ot the ults.r.!t.lonal
, C'Otnparue.s \.l'la\. .are 6ngaqed in 11 1 0 1 ts of l&tuact.l.on on 1.
a day-to-day b aus, but. 0111-0ho"". evn thougl\ tl\o 1pec1.fic
t trl n$aCt.l.onS are t1ed to trote c:onvers1t1ons. tl"e \riows
10 they llul.st be reterr1n9 t o t he t.U:I\ti!Ctl.O!'Is t)'.lt, tl'oey b Ueve
11 a houldn' t have be-n t n th pl.lblie aJI\Hf\inq that thy
12 ! n U p\Ohllc dolaain
.. 1' 11 just .say. Jour Honor, on the ette.nqth o f U'u!
c aee. you ro qoin9 to l etrn or- a c.ovr t ' s t o le&ttl that
t i thre s .a lot M.re to th:.t. cas. But kt". rJ.1n 40.$r. t
ll \l-at hu qraJ concen ebout fhqMt do not.
17 SUbJtl tute !Ol' ev1dr nco:a ot tligl"t Atld tho burden it thoue.

tt bV pTepotl<krar.ec ANI wht ttave .. _ t.n tt t'lr'\ty cunut.e-a
n tl'lat he 5poke, what dld l':.e , a,y"! That the char.c;e are urious.
2:1 &ut thes-e a.c: e bY no '"ana. Your- vn J t everytb1.n9 they
n Y 1.s true - aM, Your Honoz, Wl"n 1'1-tJ 1nv1t. yo.J to c-ons1der
23 ev.id.cnc:o tt'lat' not in \.ho I Your Ronor wil 1
2... CUaco-unt tt)at . 'rou have -- they tCJ -- t,t)ey hd .a
25 at or..a o etoc.k tot .._u. U S a tt.Otnay Jl t.hy re.
20
QO.tnq t o .sp k to all. th reportr l!lnd come out. 1o1ith
2 V-.)de-1'\CO, I a.sur.c tb.ey put t.be.Lt .beU. $lUU 1ft th c-tJ.q)l&lJ\t.
B-ased ol'\ lhie he qsll.IMC.c lf l!\cy
4 wln ve-ryth1"'9 th6 guJ<l0\1nea btt'l l'\1nec.y-a"V4n to 1\Und.ceO
s ana tt.Tenty-on Your SOI'Ior youv aeen ..any c.ate.J tbat are
' tac 1110re rio"- "th&.n thl.t. t.lii-t re l prnJc)ou
7 aei..J.vHy 1.1'let t. 1 1\0l s ;amply mJ..suaJn9 Jnt orm t. 1on.
Stt1pped down i "t.s .senttals, \.ht.'s ..,hat thi& eaae. tYn l!l
t thu is
,. t m 901..n9 to tpoak to you fot 1 coupl minut tbo\ll
11 th4 1tren9th oC thla a Your Honor, fld t.hen r 'm qoJ.nCJ to
tl- tk you -- tJa qo1n9 to aak you - I' go1nq to 1nvue \o'OU to
' l aerut il\lt a couple of aspeet-5 h.r on (1Y one. But l'm
r not qo1n9 to s t .ar c. the'o. l wa.at t.o WJ.tl\ t b! s mn1 who
lS l':a tonored t.o cepce.stnt Ee ...., Jaber of tl\la
t$ co,.un1ty. He J n lf'\tf' t.,a tc: Pl' t of "t-l" tl
rnoy t at herca: oetore you nd sl.d wl t,.. to the
t1 c.o-de!e.ndant, aop..-opria\.e)y so. t.t-at. tl'tece C" Q.,1naUQo of
11 fe:.ota cl'.at. CQ\olct tu r 1an.. Arid ..,hit d1.d tto1y do'?
20 They aqreed to & alqnatu.ce bOnd. roc hJ.m, h.u vUe, and hh on
21 th-at -..as curen b!' a rela t...ie:y wll a.DOWlt ot proptl'ty 11\
n the l..rq:er !ICbeJrtoe of t.A1"9' g: ..:ve n !3-ct that we'r <felli.hq
23 hera people t"h .. t a:r vry .nel'l l thi nk that .s .,
2A a-ppropt14t.e &C:tlOJ\.
tbe_re's r.ot.,.inq tl\at dJ!Catenuate.s Mr. Ra. ' a ratnam.
1 from h1a in this caae t Ill. other thtn that. he
1 tas even qccate r- to all)' ln t.b.le eountry. 1n liq-l!t. ot
2 u( tho o/4C't lhl1\9t tbll toa t.old you lborJt, hl.tt. curpec. .Uy
4 .men you c ons1de:: the ttunq:.s tle didn't you &,.,out . lole
s Utd.n't tell Your HO'-ot, whic.t. I fln-d 3ttrps J.l\:'lq that he''
hveo 1.n Hew tor &a..,)' ya.u.a . t e qc1d'Uated fros \lhecto!\.
fhi.s r. been 1n t.he- unuoo St<ilte'.J lJ.vlnq encl WOl tor
1 )'ll.Qo:S"I: of t'lb e<h.1l1: U.(e
Ke ttork.d tUffl.self \II) trc>41 a low t>O_.it.lon to
10 pos1tton o( rtpo.ns1bl.UtY and .aut.no.c:ity. whe.ce ha J.S
11 over a f und that h. e!(I!.O!Jt e 1c:,1ht do1la-r3
1t under tour Honor , and. ye1: th1J h -- thia Q6-e ....
U not: an 1"'i9n1f:S eant I"'>>ont ot money - ,t.e, aqain, ! u:t.d,
L"he a.'l'!.out'l\. ot Cton'r pprox_ma -..ly tho.t &Jr bjar-aln_.l'll "u-91-Ve.n
S to cr-.. u ay flr.ttu tbe per led o.f ti.e elle.gM 1ft tte corph .. nt
,, U\: \ u.h 'Wif, the only ..,ttt. he ' ever toad , I"'Cl ho.s
11 boen toe !""ore t.ha.r and lbey nava three
tl dti.ldren. Otte in col! eQ-e t.wo tere Jf\ ..,.., Yoct .
,...r . Klein c no.se rot to tell yo\J tlt.at. amo11q t.he other
20 people ti'Hit Mr 1\a jac tnm S\lpports a r e folia two el<luly
21 parents elibty-of'le: r.event:y- ae\letl r-.o tn oa
n nucsJ.nq hC4"1, bu;. l1vl.nq ur'!der tus roo! , t.ell\q prov1dea <lay-to-
u cty car J..,y h i m.
1! c11a.bet.1 C, 1naolio, had a t:aed"lcal -- nee-ded. nedlc:.ll
1 eleran<e !)Ven t.ODlir9' to t. lus COI.lrt.
OidD' t Ull 'IOU tht Mr ll:a ]Qtn&!!l - a.n.O t hve a
J !tle, 't\lur l'!or:o..c; l d Jove you to -- lo.: you \o Jt -- ba.
.Pe nt I I oC Utr; thllt t'l o a tlOt dvocat.lng for .5(111\4'
5 of .oat "'t::'or-tl't cnarita.bl tbe:-e are,
l 11gtu::tn9 tor de,pe.tat.e llud't .:.n As.1 and Afr1c-a, che
Cl'lilor-e n J l'>n her e, boat"d member of t.he Mlc.LaaJ
t Chilcl.ten' boa.:"O ( uc.J lUa tf.lt 1"' a P"bl.r 1.0 hr own riqct
t -- an 1ncred1bl y eJ.tet)l.tsned p.ftU anthrapht Gn "t. h.e erd 9f ch
10 A.s1an Children's Orqanil.at. ton.
,,
I) Your l or or, u e people th.et are here to Kl"
11 ttaje.ratna,. a,na come before You r Honor one l>y one .and tel l yol,)
14 l::.hat i !i no way clU. run i s tc !lee Ana yet
" tot: gnrl.l-ted.. non .. pecltlc: ev1oenc. );r lUn..n "r,t a yo\J to
11 r nailnd " ' "' We of t'el"d bJ 1 q:, Your "O('!Or- .
not c.ol!dng betora you t.o v l"!t Oin O\ll on
t t own slqna tu.re, althotJq.h. Ycu.r Honor, qivet'l t-he
,. of aupl)6rt, ;ard th "t:o c om::.lfnJt;v, nd t.h cnount ot
ch.r1 t.able cpvlnq U\t t!'h man has d<me over Lhe tO\Ir of bia
11 hte. J Ut!nk l t vould be. approput for to "'-a.l).
22 out: here Or" h..! s s l9nature, becauae yoll c n trust that t his
2l .:uo 1s qoii'\Q to cocnt to covTt.
.. But. "f! oflotco tile Govc: rrmen-t a subsu.ntlal M1l
23
from 1 994 to 2000, CCII"ibl!Unq it into ' very tarqe al:lartl1\ent,
2 exttem.ely 'Ja luable -- prob-.bl.y 'lalue4 at. close to teo
3 dollats . at a. tbey paid about ad .J .... t1f
:nillion dollars for 1t. t no !lloOl."C'i139"e on. that. .
were p rep.ru:ed to po-5t. as secuci ty just as hls
6 co-def-:!f"'dat'lt. dl.o and to,av frc!tl 1-us 'oll. fc ; hts
1 bi otbn:, ,.,ho" s .Ln erte eourt&.OOt"'i his !l i&Ler' . 11\ c.he
8 troom; tns elflployees , e.re ill t:t.e }'>ere t.o
9 upport him; noimbers of Ot98'1\\ut i.on l Ute Geofft"ey
10 Canada ot' the H.ar lfttn Ch;1.ldren !> Zone.
11 AnO tJ.r Canada, t o his ctedt t , loolt.ed me !t'l the eye
ll and $id Mr . w.-lden. t don't h io.v<e but. what I have 1 c...,
13 tell you I would bet on. Mr. back to co\lrt any
day of thtt These are ... _ 1 have eleven people here, Your
s Ronot: . Thy're a ll siqrlitic.ant !)eople-, .(tUpon.uble people.
1..6 ct th ...,ho a r-e willir,q to betoye you
11 and say that this tll.tn at.solut.ely C9TI be t.rU$ted t.o CO!fle back
us Co\Jtt.
,,
A."l<t ye t Mr . ;{l \? l0 lolants you t o remand hlo'll , wbat?
They ' v8 had a-.onth$' wort h of l nfon!<at i on . AA'/
11 in c-oDtplint whtsoever ;.hat Ra j aratnam told anyone
12' hey. i f I eve-r I ' m qoinq to ..... seen
2J thAt. ib other Cf..:uu. You tl'>at: ir. the Dre ier c ase there
24 e vidence ot that in the ! t)f s 1.s no't. t.'no$e
c:asa:.t , d.aspile the Gove.cnmP.:nt s :1ntent1on to try a.nd pa int it.
1 t o be so . No evi dence ..,b&tsoGvr, 1n ap1te ot the wireta._p on
2 hi.s phone.
Oo they dlvers1on of <01e>sets ln $Oifle wa y? They
4 ha.V<! OOl")fl Of
In \"our Jionor, 1 l ooked th.rou-gb t hl.s c ompl.sint
a very and I saw n<>t Ol"e ins t a.nec where Mr. Ra)are.tna:o
1 i3 to h1. ve t old .ilt'lyone Lo l l(! or 4ece1"e anyoo. lt
1 you l ook at t he em. J.re -COti\_Olaint. lfOI\Ot , you' re. qoinq t.o
9 ee '". het"e &re si )( :5toe)cs, Meybt eeven .itcks, t.t-at
10 a.&e- ll.sted. And the first th:rco s1n91c
11 c.oopet"atin<J W!.t.ne_,s 'With corrobo't'.ot.ion
>2 A.'l'\4 t.nen there a hUtT.boer ot transcripts.. And why
1S dOO$ the concl uae tl':-t th.oy have to be in.sid.er
1.f tr&ding? Th1$ .u ptoba bly the first t.ilrlo this theory s beeC'\
1s U$-ed . You-1: 'Ronor, and 1 can' t WAit to te.sl. the t heory. Bvt t he
16 theory t .'S Mr. . Ra;icubtn ll'f tol d h i s al l "q d eo-
1? eonsp1rator to make .su,re to lea.ve an e-mai l t. r a1 l . You.re
18 lot s ot tc-aud cases , (O\Ir Ho!lor . l$nt it usually the ott'ler
11 way around?
20 1't.ey wu sonderstand 'N'Ords lik't use your and
21 be cadio and. we need 3fl edge, hccause t hy dor ' t.
n the. ou.s1nes s that Hr . Rajarat.tlAl'l) i.s
2! errpl oyd tn, t.hat the.se ar "WordG th"t a re u.:.ed on t he
2 $t.reet. , and everyone t bcm oo't. co :11ea f\ t.h.e soct s of
lS an agent someho-w -- .,omeor.e J do\lbt ttta$ e ver a tzadar
1 toe a d;ay J.n nl 5 life - - c oflc:luded has to be evtdeoce of
2 insider ttading.
At:d. so, Y<>Ut Honor, -ove fl 5 you-- even i.f you
' d isaqree with m.o t. t.h11 point. -- I undexHnd 'olhV you
25
S would. Bt!t. even t.f you de d _s.e.grC!a , and y oll say vell. 1 think
1 t he ca:;G 1.s t<tl. e.t:ively st't"onq. you have ro:an t hat ' s f iiCH\9 not
1 an ext1et1<6 QC time. t oo have a tun wtth 4Ht.trer.r.e, deep,
6 !or.q.s tandlf\(} titt.s to tlow- lOt:ft , pot. JU:i t thr oll1h charity,
9 j\lst throuqh famil y, but t>y hat'd work Ofl b(!half of thfi ent1r
10 firm ttat he has reptesenteci that depends on hin to return to
l1 work on loionday
,.
That fu:t11. Your ttonor -- my u nderstanding t!'l some of
13 t h-=1r c ontracts have key dauses, and if t-tr . 1s
1.0 not t her e t..o -run that firm. it. i ' very p.os.sl.l>lo that. the
1.\ cei-S& to exht th.i.t ' s how lmport-.nt 't\e- l to his,
16 e.1rploye es, and that's tq)'ly r. hGre are so tMny of them l.f"l the
17 court r: oom he:rc tcday ,
,.
/o.:;.d so. Your konor , 1 t!.k you, \mde.r the factors i n
19 tros Bll Rototrt. tneef.. Your t-J.o.o.ox- 111 od l
20 eoos'J..st ent vith ..that wc
1
ve today Al'ld allow Mr.
ll tQ 90 to !\111 famU.y tcday
T8E COURl! Wha t axaetly '"'as your otter?
MR. WALDEH: That we -- 1o. e aqrG4H:l to a ftve ...rd. lllon-
z dol t.-1': pacxa ge tha.t secor ed by his
THE COU.RT: The a p.trtment .
rom. WALOt.N: .. _ i:pcnt me nt Thec-e otn.er
2 that can be posted 1.f ne ces s ary , but woe can l<c r k. de'tail.s
3 out wit h tho pro.see\ltor -- and chat a.ny numhet: oC t.hc poople
tha t are hen: to co- s1qn the l>o-nd co- sJ..qn We don
9
t ttlink all
.s eleven are nece$.t'lotry. We. think tht ' unduly cul\'lbetsolll.e , But
i tf 'tour Honor -wou l d l i ke t.hctn tc. t''-'Ot'Y Sit'19' le one of them 11.
w:i lhng t o post t he bor.d. And SORe of t hc.m, You:- Honor, hve
a .sa.ld t o \1$ wo <lon "t. have t o4t noo.h but what w-e nav post..
COURT: Oi<ay.
MF- t<L.El N: :tour .Honot'1
"
ThE COURT! Yes
MR , KLE. Irf :. OJ'Ie ot the pr oblems in thh- -- tn thu:
S pt'lrtJc\llac c ase, YOoJt' Honc;r . i $ t -hat:. t.he 'Whole point of -a biul
bond. and r.be whole point ot {;o-si9ners i s to ;;;.teat a
t s ctrc umsta. nce i n there i .s .some -pajn be h.ad by ;:. be
'' defndant. i f he flee.s . You ha ve to c r eate i llce nt. tves bas.ed ot\
1' : .-ct that. the defendant sit.her lo.se t reasureo or that
18 d e !e-ndar. t famlly or triends vUl be hurt H he ! l e es .

I <lon t. ':low an offer t.o po.st. hOU$8 that s '-torth
20 five tflillion. t h at.s worth ten rnllion -- 'IO\.lX' Jlonor ,
21 th.at ' s worth f i fty \ilh.on -- ! dvn 't see how that som1ehow
n c reates so" of a pa.J.n thresho.ld t-tl!lt. 1f111 c::reote. a
21 di sir.c@ntiv$ to whel"'. we r e tal ki"'9 about a d.ofend.-nt
'tot ""ho' l\ fac ing wha. t. pe.rha.p.s 1-'r. Walden t tt'linlt 1s a sever e
Z! but. t tH'I y"!ar s i s a pret.ty sovece penalty. It ' s a very
ponl.ty
toy the uy. 1t'' th kind ot tl'tJit
2 bee11: 1"'f'o4 ly 1.n U\Sl.dor t..rad.l.J\g C4:ses. b.-.-v.e
4 bton 1n til h .$t ot years detefldant.s who eM)aqed 1A
s Jntlder tt'adif!O 3Ublt.t3t.4-lly less eqregious t.ban lhts
t dc!endnt .. on tt.e -o! tc--"
21
1 \r"c- not alhgi-,9 LltaL Lhaa J. & Pa'\u !z:aod tt.at. uw-olve4.
hundred ...... a1at.y tul.laon but t.hat s POt th oo1nt
n point. 2..1 wnat t.,.e 'hilt "the
10 defendant 1a t' c:lnq. anci can t:be e-ottrt sort of
11 pac-lc9 t)'at vould <:-teet. ':.hat: t.he
l2 \lft.ll
ll Now. t 'ut. don t aee how ln ktnd of a
14 c1cc\ltnSI.ance know, p0.$\.1ng ao:ae oc "en having 3C)"''e
I! co-a.i,Un'fra ol\ " bor.d c.rtet tt'\ose d.isincent ives . Thu
Ill dfendltH. 4S (UJ.l V Clpl'b.;.e C>t (]e&tf'l-l an<l livinq Wl.th
11 Lhe t"!fO hundred trl lJ ti)n tht t'-C!! Us t.s tt:e -- i n ta.s prctria.l
11 rvic._. t,tpon., oppoed t:o u.e one po1nt. flve billion tha.t
' ' l"'c s rportod to bl "'ort.n
Tl\1 \a 1 detenclant who can bVe hune.red co-A-iq:net
l1 or:a hlll bond. nd he een pay tl'lC!A 1.f h.e - l.f b.e d.oe!>n't v-a.zn.
22 tt'IU\ to utter tl'l t.if'!tncla-.1. hrd.shlJ)
hv not. t ' otn t.hl Clttenda.hts a.t. th-is 1 (1-;;)n'c
3 evtn - Lo 11t-.nt U,t. t.ba c; dvlops and t..o t.h
21
1 extent that ve u a-ble to demonstrate in.sJ.dec tre.d.in9 ))Cofits
2 tu j n e)IC:etl ot t.he twenty ft'!llhol", t don't h.ave 9t:1od
J !1J.'C..h bath t.o .bJ.Jv ,,., ..... w 're 90109 to 'o-e ii'ble to treea:
4 M a Ol'le point tivct bilhon, or .,that ever sets he hu . ovn -tt
t w couJ.cl !1ncl t,. . rn.
&:\ a POI'\11. ttaud wluch fiJ Wolden seems Lo
? think. .u $0 muc:c f'.DO-re eQte;1ou.s t.l-.an 1.n.sider tr4din9 --
1 C!!-41Yl:l 1 in the nJe thlt thttrf! lire rt:al viiN
9 cutfec a kl.nd oC ha rr. that ptttC\Ililr-ly acute. t.ut \n .a.
10 Pon-.1 !rau.d cata, the t._ypt.eall:t move$ to seue aU
lt --t..s There &"e utua lly teceiveta .1.rt place a
12 CCI'Ip&DlOn SEC Colae tJoat seUe It s.sats.
..
,.._ &nd other tt1ud t.Vpet ot et-et .-n whi,ch OO$ o! the
1-5 co,dlllOAt ot t)ail u-..e oeteonae the-i.z:- ueta.
11 to tM t.hat <!1dn't whr t))e
U" eaaeta were. tho: neMed to oo so-:T.e as.stu&nc-c that
t1 tta!-ndnt. cu.dn't "'v u .s-t;athd WOl:l<f e.na..ble tlo
1t to flee whn t e ctt\9 theae )r.lf\da ot pena!t.Je.a .
20 I J\t want to rea pond, Your Honor, te .a cou.ph o.r
21 ot..har pointe Th,re ., - there was an rqmRent ftade t.nt
n aorM-hov bauvae T ' reterencinq tl11t' s not" in th't
u <:01'11,Pl&l.C1t thlt Your Ho1'1or should d1..seount it. To the contrary,
Your Honor. wo eha r9ed pocif:.<: in!ortn.at.io" Ln t.he cot'lplu.nt
n for tf'aont. ror ell.lnple, tne Spansicn d ea.l Lhf:t 1
1 tel'tcd tbour - - no money ._.as ru.ds on th.;at dt:aL It didn't
t:hrou')h The Nee a. !or '"uc-po, ot N)1nq
' pu.tnb1 ct..le sbowhvi tht ve d.id.n"t: need to
and o.t collld ceapllcat th!-r.q, n:e 1,
s paqet l t
Sul tt.o '-ic1cnce ve Nvc abo\lt. S.panuon W'laitLU.abl )'
1 ho.,.. tntant1onl oc a-t least t..he 1otnt t o
1 en9aq 1n !raUdl . SO tbere werel'"t 1.--''\Y profit.
'* 11 i-O }\ave evJdenC"e thilt. t.t\<e
\0 11!nd.f\t pcoflc4 in ot.h"t t:re<.teos af\d t n Htnnc
11 toe 111cterent r cte:"' ,_. e))ose not. c.o 1:-u:ludo. 1.t iD t.l'l
11 c;omplai nt n.at tl-t. 1-' vealt evidenc,
12 J>'!rUeulcly wht!J'l 1 '11 retErenc:l.nq evidence relatiru; t.o intent
!<4 in :.he Cor.a or re-cord..1nqs .
,,
1t.1 tt.e gettin9 its wrorq, that's
1C ao'l't of !I"Y poinc, .aome 4 Kt:ent, Yo'>l r lfonor. t JUSt. don ' t.
ll kft\)W whe r e All tt\e defendant ' s b:S$Cts are. Sul T t:iln tell you
1e tht the Sn La,.k !nformat1on -.. e h ave baseel, 1n llt9
tt r.teatur;e, on le&tli\Ony that ctetendant. 'n.i=self ptovided in An
N StC pcocaed1nQ a. fev ..
,,
Anci On.tly, you kno .... Just t. o -- jutt to put a
u ]Utt to tl<'l"t in on tn.e 1.ssue or d:ecoption and tht -- the
b I HJU!ll.ent thlt tt.i deCel\oant dia. noc toll p4!0ple to lie o:u to
1-4 aceive. tt\ete ll \HVftiat\lbliO ovJ..1:cnc - flr.st. U., tt. e
vhol pc-"'u of 1n1d.r t..r-adt.nq 1e Md th1-.a the
lO
1 l<ind ot lnAideX' t.rAd.ing that lo\.olved number ot co-
2 contp1rato.r.a at. of Citn'l$ over a.n ertendd of
' C.JI'fiO ,
Scond, there ex:pl1.c1 t.. about.
I 'Pc1t1caU.y ma!:k l nq wbat ' s qoJ.ng on; by not only enqaqii'IQ 1ft
1 \.Cf.d J nq l.D i t.. in mar.ru,,:r th.Jt it
1 pan.J.c.ut1t.ly ao,P'r\J.$t..l-CAt.e.d, ..nd 1.n tne lyperon
t not be c.apable of
And wuh re.spec.\. to t-hll n-ot:ion t.hat tJns la only
'' t...,enty allltoo out of .a sue.- or seve.o-bl.llt.on dollar ("und, that
11 th4t ttcfendant runs.- l' not- .!u-re 'olhat t:tte ot that i,e;.
1> t or f'JUtFO! of t.he ball p-roce,eo.--t.ng5 U: ttHt
IJ telvar'le ot lt" i that ve OL'dersc.a.no the: d4-fendatu. O\fn
u abooJt !orty or fih.y percent of U fu.nd
,,
16 Clo\tr- fund. rI'P not rn-a vhere ve qet. t.-.o "-ondre<S
11 d.oll c nu.t>tr tht ln t.he prctrt.a.l r.-pott 1 CN!'&!'l,
tl"At a )UI't red fla g-
S? l'lll not. arqc.Jnq for -- 'o
lO th:. the dtenda.J'It w11l qt det.e.Utc:d "* " re sur.ply- exprc.as1.n9
lt w't\t ... bel.iev t.o 1 :rel concern here. and whc a t 1v
u t'lll U 1 on-do llu: bOnd wtth t espect t:.o o clE.!end.,ant. vhc h.s u,
aa o f the or .uvn lflt llion dollars -- you knov, ..uybe that doea
ronabl y aaure h1. s Sut.. each case h to b
3 Oli 1t.t 0\ijlft UJ\iqu e t &cL.s , and I think t..llt th lt
-.
r
' clear ted Uaqa hoc c.hat. ri1htt:ully e&I.US-O
COC.l"T: WB11 1 1 CO-"'e tO a sc::.-e.d-e.re
1 bol..,._n theje I.WO Cl'IIOCAte 1 tt"l.t'l.k Cht. tl"e .e.-"0\Jnt or tJie
$ the ntu. one: pob1b1licy.
I 1t would be INCh nore pre-ferable h.a>re
1 collattal. v1HCh earn' )Orte t-ny iltt.OW\t: of l..ntuesc. th.e.se <taya
1 "d i.e cet\lrnod and Aoch eaiec :it. in fact. i! has to be
That' """'eh .er t.hn t.t'vtno; tc vtt:h real
to ea:t.n.e I don't precl.ade the poasabUSqr of post109 tho
1t 1n nCl/or the aprurc_nc. in Maf\t\ ... tln.
'' '4aybe ttltr een be a mS'<tU.re of c.sh. '1\d real tate .
thlt:lr" co-ugnert r llrlpot'tllnt. , e.spt:e!a!.ly it' the
Cletondl1'11.. .U qo.Ln9 Lo today And J have been
1& conotdetinq the pOtllbilit.y ot &lectcon1c I'!\Ohltorl nq t o e.nfore-e
t6 a cucfctw, ahd 1 woul d \ike to l'>eviJ Mr-. 'M!aldel'l te-l 1 Die ny
11 .tsona '"'"'Y \hat tniY b '.1n11oeery OY
,.
lt h!ro. tonl.qht, p1'0V14d t:hat h Al\d hu .,...t..!e ind tour othOt"$ c o-
20 ai9n a ptaonl :e'Ot'Jr'IUance bo,..d Ln the ot: ooe hUndred
21 million dollars. 1:r.d 1 vo.uJd W21nt tot-ave a Jlgn1!1e.ent amount
2} ot coUat.erel posted early next ,.:eellt ttoe 15
tl thet: ahou1d be al'y ot't of e-!eetron.ie at
,.. lt.. tho hQ:-t- ter" .\no m not -- 1 h." von't up oy
""lN1 bO\IL C.hat.
32
Tl:ea.a 111"10\.hr Aapec:t to. tl1is, W'hteb i .s J. t
woulcs bt ate& lot f'retrlal se.rvfcea co upervue lum 11 h<!-
J ould. be 11 t.tto cu11o J t1 t.he i i'M\Odllt4 New )'ork City a:oa. Bu\
"' J don't know, ll'ltybe et;en 1r. tbis el ect:conic 9e it 1$ ne c essary
1 !or him to trval . .\nd orntUNa \H allow cer ta111 st.te s .
f tlme,a WO aay t.ht no' qot to qet. 3-d\tiince fYOfl'>
l at. lean \.ho u.s. M.torney't Office and 1.-he service-s
1 ott tcr and/or t.h maq1 nc1; on cd.m1na1 d.ut:,o before he
1 can qo ollt.Ude ot t.he Nov ..rot ,. C1.t.y a r .some &pecitle
10 buaine.u t:-1p lliut 1 dont. ltnov bow ne:c:e.tsry this 11.
II
tl c:on\inue dUc1rt9 tnt not aeveral to t..ravel U! azou.nd
u the eontJ.ne.nta l U S then cuybe tt-ere ar e
1 \.hAlt\ l r.-a11Te.
,.
11 ovt1Jde ot M., Yor- Ct tv. f.)o\..s., you lnow, ccet.1nc; a of
n co:aphc.ated llutdn o.n the 9retr1.l ,.,rv1ce5 peopla to uy .a.tld
It rP tea c)( of hl., :t
.. M.l ICA.t..DDI: Your t 1 r5'"t of a 11. t n.a.nk )'OU ve.ry
20 I"JUCh, hcS..,.. appreci ate the Collrt's C1.1l1"'9 - And i t You.r Honor
t"l prefrs a 11\ l.Jt ot c atJ't and TAl est.ate, t.h.at ' s not qo1n9 to be
:) prob.l.e.re, You.: Honor. We 11 11\llke sure tJ'Ia: tt"at qe t s done 1.n an
u upecUted "'Y consitel'lt. v1th Yot..r Hohor .
t-l 11nd Ute travel 1..s to a l lo>4 us ;_o e.
1 1Ublni1110n on tht poi u.. 1a., \11th re&pe(;t to
2 MOntori.t\9 -the \fhec&. tl">cts a.pp.copc 1at!!, Your f'onor, l
J t._h,tnk a re tir:ly c.lr che.te need-s t.o l;o- sONt .3pc-C1tlc
vldenc-.e -- gerteca.lile-d but apectf1c
.l of
But, l:oor t?'lere 1.1 less re.strlc:l.tve t:O"t.
l \.l\a: )'OW couto \.d:e. v;u.e:h i.s Mt P..a)acati\Ait coold .. ..,. " .short
1 pe.rlod ot t.o Nko surR tr:at s >..o ab1de DY
f net me'- i c usy fer preu ta l servtc.e.s ::.o 'htC't. ,\nd
1ft tour Hono1 C.O\old talte a ppcoacb. i\nd a.ltr LtOo
, , "'''' 1t .Lt -wat clr t.h&t wtate-..e.r he "as do1nq, H. was not
1t lth tull -- nd, You r Hof\or. 1 can prcmbe you, :tt ' qoiru1 to
J b<a tuJ 1.
"
81.t t.o t.he el(t.ent thMt.. t h.ece w-ece m1 sstP by h1ra
1S that he h.ive: to face the pcssibility th"t Your Ronor
It eo-o ht th6n br P'Ul t.he f'IM'.tfler dcwn br'ld for ce him to have
11 oloctroru.c "'onitorinq or ot ro.stn.cticns.
..
..
THt CO\IRT;
Hft. WAl.0 .. 1 So t hat: 'I my requet, You: Hofler
TJI COUft't We-ll, I thj n)t tht 's a COI\.&truc.tivo
21 utgeat.ion ttv tendency "'ould be, in a ct.3'1!' l ike Lh1s, to $V
'1 tht tt'te '.rbl pedoo ot,h)ht too be like tht"ougt\ the
e.nd ot WoVtu!.ber But t.ht. ' .s 4 c:onsU\I.ctiv a-ugqestlon
1 the petton tcoop ! n 1n _oerso.n one.@ a vee:Jc. Th-itt.a not
2 'WI\4t l -'ftll\\. nut 1n other way s-, t w.a nt 1.t t.o ))e &trleter --
J m)'be 1 che-c:k1ng that. he U 1n tho cal!idnco
"' tVOty nlc;l\t, ena millybe , at leilst through )0, 1 ve.ry,
ve ry reotrlet.ed t.rvet sctledulE! . ts what you ver
t t lHnk.inq bout,
t1'ft.- WAt..OEN: I .,.a .. Your .-ltbOU91'1
Tli!: COURT: 'feh.
Mll WALODh - - 9a1n, 1 tlu.nk t.hat tt'le c'IJctev, to
tO the xte"t that he n.as c:! ie.nt5 thil:: he. nee-d-' to eteet. even {D
11 tbt cJ.ty -- alld. l.t. really htpeses, l knclo, a vrJ heavy bW'dn
t: OQ 1aetri.al se:-va.cea A..'"\d l t -'t. t:u:rn.s oat., leur Eo:mor, :.Mt he
f1 ta lCtre-..ly celfllr\lnl.C4.t 1ve and rupeett:ul to tne ot!lc.e.r a.tt4
U .t n .. COflSLC\IU l V. .. ily tbe w.ay tb.at J'GU '-OU ld 1114Dt
'' ao. ... one vho bel 1 eve a if'l 1'11 1-nnoc..e.nce f\d. lntene1S to .-::ay he.re
" t.O Utht.. ths Chf!rqu - u in t.twt. &.&1\ner, u . n Your
11 .tfonor r:oul.d conunue.
,,
So J think that .Nove:aber lOth l.S " - J llJl
1t a pproprl.-te Ptrl.ocl tor t't: probatiof'a.ry peuod
,.
"
COURT; Yeah.
n t],tce A.te t..he a11ghte.st _nfract1ons , or 1f a e ve n a bad
IJ ttitud. t hat Your Ronot 1.s goJ.ng to rev.tsJt t.h.&t a nd l.Jt;po_.e
1.4 :t-.rl".or concbt
tKll COURT: Yan. Oll t he -- on t.he flip .2J.ae. i( Lhe
..
1 pr:t:.tlll ser.,lces ottl,er aa)'a tnc.. :.h:u quy ra-..1\ t
2' beln<J c:oope:r.nl"e OUt k aa rreeent.d r:so,a ... "i t.n &f'd
J .Jan"'&t)l M cellly ,...., Lo Ltavel lot, .so;ae
4 jUO'i1 prea""NblV the OM on duty tt-e- .. of
s 10, wo\olld as c.ne Ut\olltlon '- t.l-at. 1.1\d 'l<Jf\t a.qree to
a 19' l.lroader t.:-avel.
at.t. l'f"' J\:fiqeal'"O t)'ro-u.q-h ,ao.,e.be. lO tt.e.re oe
no tn\lel t!tOre than {tf!.y I"'U (l"OR NeY Tort C1t.y ta
t not U)'inq to be crary bo"t v-.,.
11 aO!WthltHJ
I., tryi rrq :o do
n


II
"
"
bH.1
"W..I-Lou: -c> .. l:tr, ... , 1 ...
Ttft: CO\JRT 1ell ae why. SUJC
M:l WALOfNl t<tr. Jjajretnlltl ' t dught sa: 1' ut Penn,
Tl'IE COIJI\1 Oh, )'fit l -w t.hat

tK COURt
lt to ....
ln tt,e ...... 1n tt'le ceporc
n \'O\lf aonor .
r-:.E COtJtt1 "
WALe" So .. ! }'OIJ C:Oy)Q at ctrtend to the
,.
T'! COVPT Yea, ahout '"'ondrd tf\le
I .. lltl Yh
N.A WALD.tN ri"t i Mt
TME Oky,
H.i' WALDEN We ' r t Qlatotul. H.OP\O.t lhan.lc. you
TJ\t All 1 'Vht But. the ldc 13 t.hat -even 1t
" to qo.t lo vlaH PhJ.ladelpl'l1. tlltlec retucflis. t-;1 .New 'fork.
CJ.lY v.at n.iql'l!. o t t\ 'I" .,..ole advatKe sdled"ule to
t tupe:rvaainq probtUo"' ofrtc.r .. aayLnt
tO leavt.no 1\e'a tt.YU9 1n Pf'llladelptua .. iw'.s
11 .r:OCI.if\9 bee.):, AJ\4 a c:ontact. :: qu:ea s C,.,i!.S.4t days
tJ ,. pho" ao - to t!"at. ottleet CA!\ d:.ec.t. up All
u 1l9Piit.
,.
..
Hi'. fl'le" you. 'V<'9
T:t.l: cou--.r : t'"' U1lf'I-Q a at\d oUe.l !roe
tt Hev Yor\ C:tt.Y And _.,ybe "'- thouJd act:ullY put this on the
n c1eftdar - 1 don't thl"k ttut ,..,. ., .r be-e:n dono so fu 1n
tt ad:a'\ee. .;. en v.-e c a lef'ld.ec tot Dec:.cr:;;.bec l$t.. \4'h1d
t thi.nk t s at nlne 1n t.he .c:-n :.. oq fcc
"PP4"' -:.o be ':he lvd':y ._.'il..ltrate juoqe: o:t c.ri.a.il'la.l
lt
n vt ll De worlted out. tt'lt court. dat C:.Af'l be '"-&llceled,
veryonc c" corn J.M af'IC1 hv
wt\et.her tl\e c:ono.1Llona arould now b e \.tql".r..ened or
11
Mil IIAI.Ot!" you. Jt.dqe
T.rl:l (OUIU All za9t>t I t.hutk ta \ti.., ot the tct
.I t."': "" ' "" flvC atvl Other- de!enda.'lts II':A t. ... ,. "1.t.lMJ
.t J'.Atlentty, '" at:oul6 tern nAte "':hi& pzoc:-ed.lftoCJ. the ti'UI\'J
5 r hat to le titu.r O\it I thl.nk 1 t'tle proper ot
J colltr l.. trd I th prope.:r A!I.Ount: 1 Uion
1 dol \Its to be pott..-d ...... 1'4 F-refec flloO.st of 1t ln cath, bUl 1'
a not Qolnq to :.t. \r>d t.l'>...e other ch.lall h
HI( . liA.l"' l You i-ttl\er .. My J JUa.t h' "!
.. l li t CCKWH - - the deadl.tt"e: -- yea
n\ "f' ,\LtJI..tl t lr-cht.lo_,...lly, ir v-. vre Ul tt.e nete
12 tn per'"' 11 o>! -:"t:.e. qo.v.q Le And
..
..
tS to do q,-aduatMt ... _ qradua.t.eG U vou rot non
te c.olllplh,ce. And JO lt' t.en IUl11on dollars - l \.hink J eouto
t? t:ntll'li>l.o t.l'lat. fth t y qu1c"lcl y 1 ceuld p r obab l y qor. t\llent.y,
' ' Your .. o,.or. bvt t.hat would really !llllte a cath-tt.rappd
If
Z0 lt.J'.d 10 I ( 1 C.O\I.]d bve te.n lJl the flrlt lf'lottlf'loCe , "d
tt thn ve could rva H. \.f'At, ana on O..c:!!HI.bet l9t i"
22 tner vr c:autes !or concfl. t.l'lel'l TCNr Honor c.ould
H a l\rl y lf\cr t.be VAU'\t .
1 CO""'pllint ObVtO\IIlf lUTI'-1.-.q Ua ili..O'S l.!e \lpiJ.de dO\rf\, el'ld
2 acme porl are Abl t.o bet-ave- in a .cat.ion l .uy when
1 conlron\.et1 w.l Lh thllt 0\.helt people ma y ao i.tl'"utst.v.
.- ov" t.hovQ"h iL doeen t. m&kt a ense loqicaH y
J rn tryi.nq to ;Jve thf" r e &Jonable
&la\ltt.nc.e tht the' ,.., 11 not be- s ome :a.udden l.w<pUlt1ve
1 wnavaor ano tlit 'I "'ny 1 thi,.,.k the short te.c 11 tr.e
1 l.rpor\.lf'lt one. .ll'ld tra.n>-l.y, 1 t.be se.rvac ofhct:c
t rpo.,.ta tt-\ veryt. .. h\9 u. 9.01.ng very ct-.n I \.hll''li: it.
o 'tl:o.;ald t4 lota.cat to rt\lln bt"t. of aoney
"
tZ 'Ulhol'l, or c h ra whien ca.n a..e &el
u oe ION c:utltles .altl'!ouqb ve1e h:.aorn.ed tl"'
''* d.t not t.o c.oo c.HeQ bout tnrl
'' t.t.el" .
..
"
,,
HA. lfo\LODt: 1 don t. ..,.._nt t:o qet 1n n ws.t."PI
Ttl COUAT 1'tah Yeah.
H.\, WAI..OtW Okar I'll c..a.ke
rn COIJ1n r aut.. yoo .k:.neoll.
-- t!o:.e aoo.ne.r U>.e better a"ci r '"
2'.1 thS,Iltf'lt of t&)'i1'19 Waneao y o.r r;ext. ThunQ&y 11, you
24 ltnov, c:tthty perc.eM ot 1t cn be po.s.t.ed hut a qoo.:l
26 .eton wt\y y0\1 thould 1\e\' Caw dy$ tor lhe 1
39
t.h.lnk th l'tl.iiY not decide to m..ake a &tq f u..a5 ._
teo.r .ot dityt. !ut l'ra. '-"'<19tu:9 lf'lursday eot rtlft<! r<>st. tho
' colla.tot l. All rJqht .
WAt.OtN: Thitl'"k yc.u. J tJd.qe.
'tc!E COURT 1t:\.ICA4ay t te'\ .... ll u
1 then yov rave t.o 1n ar'ld calk to ([aq\nra.te J\l.dqa t:s'l
7 dvty t.e.te, unlcs-a f.t'le Govern,e.f"t egr-ea. t.ht dl date c_e,. be
ad)OUJ:ned.
So .!wt 9et typ1.n9 t h i bund next door . }.nd .s s oun
10 u. la uqned by tu s wtfe and fov..r t'in3.nctUy
n persona, then he tll be .relaased on 1 call re<JU.l r
1a pt"el.rJ.Il 'upe.rvl.aton, but l. hope l "'lle tt t.ht I
U 9Xf:&Ct. espeeJallt 1n the Urst eoupl of " tht th
plet.rtl setv!.cee be qlllt. e acti<lf! in Lal-.J.I\9
1S bO\Jt exa ccly where }'!e a 90inq wit)u.n hund.red-ten-J.Je
11 r adiu .t nd vt.e:!'\ n.d "neore. t-e ever)" rn9ht.
H And 1 expect t-:.1m to .-n$\fOC th<t.i.(' ptwne cdl:i .
"
II
k.-=t. WA.LON: you. Yovt M:ooor.
r* COUf\Y O-k)' L9t vr!te thia out.
l1iL .t<t..&IN 'Y\Ir ttono.r?
10 Yes.
ftLTN: h tte -- J..t t - 1 '\lat. wa.nt

T?..B COUft-T:
....-..R. -- thlt Your :Honor i s .otdt:t'ing
Your Mol\or 15 ordorl.ng hllnctted-ru.llien- c oller pr.sonl
2 tec ognuaoc.e bond -
rs' 'ight..
Ki\, [(LElN: - to be by ten mt l!J.on dollrs
s by-- l ' m o.cry, b) t enty tiUJlion tioUac b)' "ext Tht.lf'aUy
THE COUf\1 : Cor...-ect.
MR. KJ.. Lltf : And Your Hon o1 il orderil\9 t.ha 't o:. h
1 Cle!endarn. be rt.led. today 1! b e a qot fou flna.m:u.lly
respons ible peron, 1nc:!udinq hta 'llft.fe. t.o .;o .. a t. qn tho bor.d
10 IJoiS COVI\T Yee. And you re e ntitled t o sk tho.s:e
tcuc people to:: C.an.af\CU.l <f\'at..1ona. AllCl h Jays oea qot
12 el.even people her. fte ll qlv e you hit be.st toe.
XLIN1 Ondertt:ooo , Your And t h.e ttavel

tO
15 Th COOR1 lf there ' s 1 cU pvte. t ' 1l be here lat.et'
11 an4 t eo Rill e s from York City?
.. J!!S CO\IR'l TMt'' r tq.b.t
.. "'-' KLCtU .I ta\m!e ebo sun-et\der and n.o f'e-w
21 applic411.ions with cespe<; t to travel docum9nt .t
22

..
tli'2 COUit1: Oh. that s s_tanda.rd. )eah
MJl WALOtN The flU hilA h1a ps5port
tl'. WfJC ll;.nowt? t!o may ft.f.Ve t:'Xt-r&
Kr .U1arat..nm. th.e:re a re vaya you C"OU.LCI
t aftd vtalt )'o:t..sr b.a: U tm nca. IJOing to 10
3 th.ccuqh 11 l..t"to posslbill tie .s th.lt I olllll Ct'<OCkl ng t bOX vbJ.C.O
aurr.ndr !l al\d do hot DAke lny neot
s auPllc&tJ.on
l t WOUld bO VJ. oltion o f YO\IC ba'll
1 JubjectJ.ng )'OU to re- t fUtt nd ven e.once ...v&bly p;o.secvt.a..cn
a tot ball JUf":P1"9 you t.o to 4CQ\1He 1 bua
9 t i.c:\.t. Ol" \.r <l ln t:tdet ...,o\ll.d t.k vou c.o 1afy\and. Yo"
10 e.nt. 90 ther You ca" t 90 to tlew f'uptnt.ce. So t-bat.a ail
11 en(Ompassed ln t. h i5 little box t.hat l'm checkinq t.hat s e. ya
l2 t\lttertder tt&vel 1 'feal.it;e 91-s-&po:t. ha beef\
'' but. are all of travel dcc;....r.,ents Okay.
M.fL t<LElN 11-od, VOUt Hoi\ .....
rs Jill 'lea.
MP. tt.T.HI; -- tt 1 "'l' it 1 "WOuJd. roor Honor,
tl uuotbel' ono. <On$i.dox il!\posJ. nq rcme 4-nd
1-1 _,nlt.orit!q next ...t:en Ue c a ah 1.s aU:PfOOC Lo b
1t poat.ea?
TJ"tlt COUJtt: WelJ., I thln)c tha.ta a good
21 U-Als:! 1 hear a g:o.:XS teason. 1 '"'oold $AY tl-"' t: the. dfenda.nt
2t ahouJ<t in New York City until t h.t co1la te.r1 h po.s-tcd .
2S Now. -.a.ybe there: .s .Jc me rea.:tan .,by qoc t.o 9'0 Ln the next
.:t f e w 4Ayr;# tNt t tbu'"- ,.c $ VQU"9 be apenelin9 a lot. o! t 1.D".C
2S w.trh )us l.twy t s .
4 dOf'l ' t. --
Mit. WALDEN: Ari d h ta tmi l )' . Your Honor .
COURT : Artd h1a flllllly
42
liP:. WALDr4 And Ub prtnal. servtces. ArlO I
Tll COURT: Y'C"ah.
tofR, WALDt:f\1. -- expuct t.lu:cc'.a to .be .a ptobltll'\,
7 YOU&' Ho not
10
"
..
..
n' COUI\1 ; Ol<ay
kL11+1 1 hoo - -
THE CO".JR7 : So 1 vlll add that.
HR k.L'tlB: - tl!IO otbtr que_st10I\s, Yovr Honnr
lfiE: COURT Yeah
HJt KL1: Wo\.110 Yooc Konor cotalder ltUJ
_. the nwr.ber ot co-.si<Jnr. rot to:- \ody but by
15 n4!Xt thur sday would Your Honor c:ons:.u:ter inc.reaaJ.nq the
16 of eo- dq,. ... _. r; h.at Ovlct be on U bon4.,
11 tX COURT Wll , look. Not.nin9 u rltten. tn Jtone
18 J'lte . lf 1t \.urt'l s out t.hat t.ne_re ' !I ral!y 1ome 9ood rso.n why
If ve stoo:ld bdr.q, y-ou 1U'Ioov ..-ore ):41ople. 1 quets 1t a not.
:o ltlconc ei"Jabl 5ut l :'lave a !o_eh.ng thet there r qoin9 to be
2l Co\lr co .. s l.qi'\OFJ l"oere 1n a.cld..itton co the Wl! vho real ly u:e
a.l9ntno very se.r1..oUt pi.ce ot paper
Whon t hey Y ve are jointl y l'ld l1chle to:r
:M ont h'llodred cu.llion dollar ctu. hl.a bUl
a conch.t:1-o.n , t..t>at.s aoc.1.01l And J nl"'!! tocl1aq ll'lat
tl
tho.se !O-\U' co- .a191'\ 4ts ate qoinq t o C)\.llta popl
a M&ytl l ' ll b --
4;-0U ct.ay, a tot .. ! o! !1..-e Ute ..rt.re --
T?.E U: t .s
10
11
M/L l<LE.J.Nf p!. u.s tour
thE COORl Tho tffft: and. who will
ttJt WALOtH: Th.at:'s ..,ha:t - w t,_at 1 --
Tl-! C.OUR.T -- your flllnc\1 qua:Jtt.ons. okay
MR. KLEHh 1he l .ut t,..i n9 I ' J l l.tk Your Honor .u
tt th't wo can - - " c an qet ttact:od on tntttVicwinq
tJ bvt t \l<klld. .a.s.k. the Court 1! you wo,tlcl conu<ler the
Nil order :so thal l C"n c;on.au!t w1tl' Y ofltee. ....s t.o
ts or not we va nt. to PP L
II
17 that . Why don't you try t o dcc 1d.c that in tt.e n xt !1vo
' ' rotnut.t.s l You qo t1qbt. no\'1 end yout Npe-:r-i ors 8\lt I
tt c"lly tta nt. t. o <rt qoinq WJ.tn t. he ot.hr poopl -who bOn
lO l.t..u'\9 on c here.. Thia. rea lly tUan r.u.;l\ torw;e.c
ll t'han ba il arqument.. so --
ll 90lnQ. and .,il l fi'IOYCI tn q e-t everyt.h.i.n9 901nq
"
f"iB COUt\t t 'reah
Hit . &LUI ; 9Uft'.$ l. ' ._$1Un9 t<Jr t'talf an bo\l.t to
tl to Illy of f t.c e a.nd ju.ac. Mke. a dtertlll.an;atiol\ about
1 or t'lot <we wan t: to do t.hi"
T:i COU.RT Wll. l'll 91\'0 't'OU \lnlJ.l ton
" -:'1\in\ltes tt.e l' .u.x o ' c.i<JcJt: l th-tnk it s 901nq to take- tl'le poQr
people n ext. dooc t1f' t n at. ltaet to t.lls bond up,
6 and t.Mtl .u. JM.y t.k yov a little t.U.. t:o uk tre $.e tJ.I\&1\C.ial
1 qveat.10rtl the p.ople ct.ua.tly c.o-"9n. tC \beces
a dilp\olta, 1 C)'\lUJ .it'J qo1nq to ha.ve. to C.Od'e Lo 1 hope th-.t
t one ot your coll eagv6.t ha_flefle t he e: omplatnt sc t nt\.
10 ean qat 901ng on o141 thtnq e l s a , b .J t --
,,
12
'I I l l(
..
M.::t l(t.1W: 1 belie-ve ttt:y can, rovr Jio:'lo:r
Ill COU.R1 Okay You ' ve tot unt -1 te.n P.:rn:tea att:r
A K-1 N G lJ Nl P
STHAUSS HAUER & PELDLLP
______ ... __ Atl6tMyS atlaw
VlA HAND DELIVERY
Honorable Theodore H. Katz
United States MagistTatc Judge
United States Courthouse
500 Pearl Street
New York, New York I 0007-131 2
November 2,
Rc: United Stales v. Rnj Rajwatnam. eta/
No. 09-MAG-23.06
D.ear Magistrate Judge Katz:
SAMIOHGUHA
(212) 872-10151fax: (212)872-8002

We represent Defendant Raj Rajaratnam in connection with the above-mentioned matter. On
October 29, 2009, we submitted a letter to Magistrate Judge Frank Maas, who served as the duty
magistrate that day, requestiug reconsideration of the conditions ofMr. Rajaratnam's pre-trial
release. We have been informed that Your Honor will hear this request on ThUJ'Sday, November
5, at 2:30pm. Enclosed LS a copy of our letter. previously :submtttcd to Magistrate Judge Maas,
in support of our request for modification of Mr Rajaratnam's bail conditions.
Thank you tor Your Honor's consideration of this request
Submitted,
Samidh Guha
Enclosure
cc: Joshua I. Klein (counsel for Government) ( via e-mail)
Jonatha-n R. Streeter (counsel forGovomm<..'tlt} (via e-mail)
0114 8tyanl Park 1 Nt>w Yofl(. NY f 212 612 1000 f Ca-Jl, 2 12.872.1002 I www ;JklnguriiP com
A K l N {) U M r;;
STHAUSS HAUbB ,& FELD t.L I
Gt l{IW
VlA HAND DF.LlV.RY
'1 he Frunk Maas
UuiLcd Mngistr-nte Judge
tJtuted Courthouse
500 Pearl Street
New York, NY
October 29,2009
Uni./ed States Rajaranwm. c1 al.
Docket No. 09,.MAG-.BlJ()
Dear Judge Maas:
JOfiNM OOWD
l02Ml'438Ma->
t.ott.
We respectfully submit this letter on heh:l)f of mrr client Raj Rajaratnam to request a
tn ,\.-Jr. Rajarutnam's bond ro $25 million ((om its pn.-sent $100 million amount aod h>
ret:}Uesl ..1 mouitfcation ofthe .c<mdi(h,)n.. of his pre-tria.J release so as to penn it his travc-1 within
the fo11y-eJgbt states. ilar from posing a risk of flight as lhc Government has
Mr. looks fonv.arJ to his d(Y jn where he wttl be aMe to defend
himself again$ these
Undcf')igned oounsel have with the Government, which does not consent to thts
request
Backgr011nd
Jn the early morning of t='riday. October 16. 2009, Mr. Rajaratnam, the fotmde.r i.lnd
Managing General Partner of Gal loon Group, a New hedge fund. was arrested on a
complau.1t and GhargtX{ with Ylol.ot;ons ofUle tederal secwities taw':-1. He was presented
Jlear the close of busiuess on tbe smne day. At the the Government rC<)ileSted thac
Mr. R4_fa.ratnanl be dotainedptior to trhsl, cx.mtendin,g tha1 it had u "specific, very significant
conccm about f1 ight risk.." 1't. ill 9;4 - 9:8.
1
1
"Tr" to the transcript of the initial held. be foro 1he Horwrable
Magistrate Judge Douglas F. EatoJl on October 15, 2009.
Onl!>.fltlft\nt f Ycorli . !NY 1003& r 't &72.10()0 f0Cl2 I .
ROOetH>. SII?W$fl. BUildrJg I 1).13Nl!w N W. l 0 C 200'Je1!'ie41 8874()()0 CQI'I\
Gl ' Ml'
S I H .\ Ut.;<; S. t.t11t t
!Inn. hank Maas
<Jutober 2t1, 2{){)9
Pog.c 2
TJ1.e Court the Govemmenfs ta {ietain. Mr. Instead, the
Court released him oua $10Q ml'Uion personai Raj11tatmnn securtXI the
bonJ by posting $2.5 tuillion cash, pcl'WnuJ propettyval\ted 3t $J 1.5 mil1i<.ln, Md the- si8ftut ue..:;
of ri ve The Court ibdl1et limtted his move-rtients t() withln J I 0 miles of New York
City. Al Ole time, lhc Court sfatoo that ii would b.e \vtlling to. tC4X>nsider these.condttions in the
future, indicating that the eondit!ot1s were a proviskmaJ measure des1gned to "gwe the
Guvcmment rcasonJbl.e assuf'ance thi.lltherc will11nt be <;ome sudrl<.;.n impulsive by :V1r
Tr. at 38:5 - 38:10.
The Oovem.rnenf'$ abom llight dsk is -tmfoundud.. and, .indcw-, rs.ts {).h a
misunderstanding of the relevant tacts. As n onerous conditions currently imposed on
Mr . .Rnjaral.nam "s are m no way the lc.a.st rcstricti\<c to onsute hts appearance t}_t
ll'htl. as is required. See IS U.S.C. 3 t 4i(h). from having any intention to flee., .Mr
Rnjaratnam juteods tn vigorousl)' agajnst th.e Government's charges and to clear his
m1me. Mr. a t.Jntred States has substantial and ong<>ing [md
tics to che Unltdl States Mu the toc:1J C-Q.mmuuity that he has no of
ahiHldonmg - rn.cluding the presenc..-e ufhis family and nO'arfy $30 million worth
uf real Finally, Mr. (eTllain:- act ively engaged m the business of Galleon and
to assi!'>tjng Gullct)n in its .. ttion witl1 low enfote<..10C1ll 3Utlmritlti'> wltile
cnsurjng tlun GaJlconsinvestors and employees are freatcd t:1irlyand equitably it:1 the courbc of
winding dowu Gall<..-on .. s business.
Legnl Standard.
ln detembling the appropriate condit ions tor release. Court is to set
least o.nerous-lJCt of contHtions that will ''tcasonably the appearance of the person a<:
required,'' and nlso not "endanger che safety of any other or the community.' 1& U.S.C *
J l4.2(b). Jn so doing., the Court rnust cntorcc tne Bait Reform Act's "strong policy in favor of
rei case on personal rec{)gni.Lancc or on an unsa;ured appearance bond. ld ; sec also WrJod , .
{ ftdted SwteJ, 191 F.2d 981, 983 (D.C. Cir. l968) ("Th.e Bail Reform Act creates a. strong P<)llcy
in fnvor of teltase Ol\ persNlal Tf a personal reC()gnizance bond or an unsecured
appearance bond will not rea.c;onably assure !\lid !he Court rrlw:1 impose ''the
leosl restrictive ti..tr(her condition" which -.vjtJ provide that teasona:b1e as-Stiral\ce. United State<: c
Mudoif 58<i F.Sopp.2d 240, 246 (S.D.N. Y. 2009) (cJtiag 18 U.S.C. 3142(c)( f)(R J).
fn making this the Court must weigh. ;nter alia. (1) the nature of the
offense chargt!d; (2} the .wetghl of the evidence the (3) thc .. history :;tnd
o t'1T1e person charged: and (4) the nature and senuu.sness of the risk to the community-. 18 U.S C
Within the Sec(md Cir!;UU, the poss:lbihry that the defendant tX>uld inflict cconomk
hJ rm oo the community docs noc constitute a cogmzable danger to tbc safety of the communit}.
. \ K I <-I t : J\f P
$ r .i:t '' u s s H l\: u E .n &. P 1::. L Lh 1 r
*J ' li t; U . Jf 'ff
Hon. Fra]lk. Mllas
29,
3
MadqjJ 586:F.Sopp.2<lat 253 (
1
'(C)oncern.about fuh,ire nm1physiC'<\I hann. to the
been pdm:arHy conskle'ted .. . in the context f10mogrnphy or tratncking,-c11argest).
\Yhcn the safety of the is uot <Jn isstt.e, rhen 1he bt\il tum \>l1 the.
Gov.ern'rnent's showing hy a the evidert tl)ni the detettdant rlsk.
:ke Unitt;d Sta!,zs v: .Shalru1:_ 811: 1,$9
1
1QO (2d Ck ,198.7). The: tlOt and:
Chnhotmake that showing h.ere;
Mr . (taiat!l:flam'f.ExteftsiveTies to the tfnitcd States and tbc.Lotal Comntunitv
1\..Jr. Rhjatt\t.UU,Ill iS' a fifty.-.tVJO citl+:et:l.QhheJJnited. in
Sri L:rn#a-. i hre.d.iri Unit-ed for tiettrl y thirty ye<irs. f.tl-lbat time, Mr. Rlljarntnam
e!liahiished cx.tcusive and continuin,.g sn4 economic t1) th Vnite<i States and the
alla:Y any C{)nce.rn that h.e is. a risk.
l'o;renttJISt ID1'!QJl$ M,r . '$ con11ootio.1)S to fha his far11H y. Mr.
s entire irntirodiate family-irJ.ctudh\g iiis -.vi.fc 1.lftwenty-one his three min<.''
ch his pate fits, \vj'f *s :pa;rcnt$: his t\vo brothers and two all i::iUz-ens
residing here hi 'the States. Mr. Rnjaratnaltl lives ln an 'lipadment t'hat J1e O'\Vt\S 'in New
Y{)rk w it:h hjs \-Vife and childrt.".h. Mr. Rajarat:l1:im ;flso care fo.r yc-{1r ...
old father and S-eventysevcn old nKithcr, Who 1i with hlin in New Y<}fk City at.id fu1
htds tfnanciuHy fCSlX'Itlsible; 'h'ro p(Mr. school New York C1ty
and bis eldest currebtt{attends in the United States Mr. Ra;farairunn 's siblings,.wi.th ttrc
ex,ception .ofo..r1c sister, all in the U oited St:ates.J. Mr. R:njaratriam and
are o-Jso Dnitecl States citizens living in Maryiand.
These extensive, and deep family tits to tbe fJnited States give-M.r. Ra)aratnam
every incentive to remain in the t fnited Stats and hunsel Mt :s toy!llty t()
his fiu'uily and he comeS from. a .colture in wnih com.mitme,nt to -otte;'s, fam)Jy ts
of R,11:jatati'lam co.uld not even lils
family by tleeiug the country.
tn adrlhion to th9se extensive a:tul. strong filmily coiu1c:ctioos to th.e United Mr.
Rrtjruatnmu owns worth nearly $,30 ooill1.on. including an
in. New York City vah.wd ai $17.5 'lllillion, a homd,o Corrncet'icut v.a{ued at $10.5
2
One of Mr. sjstero lives temporarily in Singapore with her husband, who l!:
a U.S. d.jpJo.mat.posted there. During the October 1<4 2009 pre.s:eatme.ot
.that M.r, hn.s a sister who lives in South A mat She
does not.
(, ,\IP
r H i\ u s s H :\ tJ n s. c ' o , .
I ion. frank
l)ctvher 29, 20(19
1\tg\: 4
million, <U1d a in Flottda valued at .. I.-+ m.lhon. 1hc tdea that t\.11.
would sjm pty abandon those to avoid n trial that ht.! is oohftdcnt of Winning is
1 caHstic nor cr\!dibla.
Mr. R.lJaratnam's pro!t'SSlouallife and identity ts .aJs< anchored irt the United States. Mr.
Rt1jurntnam S'p\}tlt the la..c:t seventeen years iifc building Galleon into one ofLhe l<1rgcst
most suc<:cssfiJl mvcstmem funds m the cottnlry. lk volumorily registered Galleon with. the SEC
at :1 time whe_o othtn hetlgc .funds were rclu(.'fMt to do so, and ht! hired a CbidC<>mphance
to ensure tho 1im1 's:adheren<.."e:wthe. ll'IW. Mr. najaratnam hAs AO> intcotiott of
nhandoningGal!eQn and its cmptoyees, whQsc futures ha,o been imperiled a.-; a result of
Indeed. he remains tbcuscd on the of G:illeon. Galleon was. in a
\t.'T)' sense, tlie great work of Mr. R..'j:mnnams life, a.nd he is committed t-o ensuring-that
v41 tr.on winds. dO'WO in a tnanner tl1at is fait and equitable to the fund's investors Mr
RaJamtnam is equally dedicated to 125 em:P,Ioyees
1
whom he is actively hefping to
!'lecure new emf)loyment while simultaneously h-is :1nd thc-companys reputation
against these charges and the relotoo SEC civil eomphunt.
In particular, his A.!'fCS.t, Mr. Rajaratnam and his attOJ'tleys have worked closely wjth
's Management Committee. and its to l.hat documents are preservt.>d and
that the Oovemment 's production requests are auswercd iu a timely manner. rn fact, amonk! 1\o'll.
Ra_jatatnam 's fitst netioos upon returning to Gall<.vn after his was to order that nJI
be remove<J fro.m tho office ll.lld to direct thai a document pre5ervation notice be .sen1 to
all employees. lle is committed to ensurmg that oonlpany d!.)cumcnts, which include meticulou::-
cr.ade records. and publicly-nvallable investor information,
pteserved, and, tn is that those documentS mid will acq,Jit him of the
charges of insider 'tradmg an'd restore the oompany's rcpu'tation.
Firially, Mr. Rajaratnam him::.elf is an csreemed philanthropist and an established membl!r
of the community. Over the last five years, Mr. has given mort than $20
million ofhts pursonal wealth to chmties around lhc worl.d, mcluding a number of orgaointiom.
based in New York City. In the :.ftennath of911 I, Mr. Rajaratnnm gave S7SO,OOO to the
firemen's F'und. Mr. RaJaratnam is also a major donor to and, until recently, a member of the
Soard of Directors of the Harlern Chi1dJ'cn s Zone. a non-prolit <lrganizatfon dedicated to
breaking the cycle of generational poveny fer thoosaMs of families in New York City.
3
Mr.
Rajaratnnm has also mru:Je subStMtial gills.w City l rarvcsr, which seeks to end hunger in
3
Mr. Rajaratnam resignt-'<1 from the bnard of directors tO.Uowing his arrest in order to
avuid interfering with the important work ofthe Hutlem Children's Zone.
4
.-\ h 1 :-.: n t I'
S r H 1\ US H H \ U H & F 6- L I) l .t.l'
H<)n, t: r;mk
2(), 2009
Page 5
t11roflghouf New York City, Md The R\.)btn Hood Foundation. which partrtcrs with
rnor tlutn 240 ofthiJ be:,t }lOVt:rty-fi_gllttng nfmprotil OrtJanizatt<>ns in New York City to mitia.te
ttn<.l projects meet ootnmunity Mr, has also endowed a
scllohtr.sllip at lhe Un ivetsity of PcrmsylvruJia fur student<; from
The.Govcr.ut)lenl's Suggeslion that M-r. Rnja:rafnam lnte.ndcd To Flee Is Mist!!ke!!
Uy .contending I hat Mr. Rajaratnam po:,es u flight risk, -the Government :-:;imply
._'X.tcnsivc tics with t.he Unitw very type of tjes that twve long been rccogmzed
m the law as refuting i;hg)li ri$,k. MoreJr.C>u!}lin!;J is on inc.Qrrtplctc
infOrt'llQ.tion to that Mr. Raja:mttu.im to-' ffcc the Uilited St.a.tes on the mo1ning of
his a.rrcst. ln footnote ten to the <:om plaint.. the Govtrn.m.ent notes that MG Rajaratmm
purchased a plane tkket to London two days before his arTest, that Mr. Rajaratnaltl
irncudc::d w tleo.
That suggestion cann,?.l sllrvive a full review of the relevant facts. The trip referred to m
the cl'itniual compiait1t was weeks 1n.3dvanc-e fur tloC\Imentcd legitima1c business and
persorw1 reasons and well-known to his t3mily i'.I J\d.Gnllcon collt:ngucs alike. The
.lJf M 1. fbjamtoorn 's trip lO London were to atfenu thv Umdon Film Fcsli val, where Tcday $
Sj'lcaa/, a film that he hnd hel,ped ftna.uoo,. .w11s bl."-tng t!tid tO tfle.et witl1 poten11al
investors tn a new Sri LnnkM. fund that would have been registered on the LNid{ln
Stock Exchange. From Lond-on, Mr . .R<Jjaratfi.a:nt i.ntco.ded to t{l \\ ith his wtfl!, '"ho
to celeb rote her 50'" "birlbdayinthe city where li..u-. Ru.jaratnam her nonrly
years ago. NQtaiity. as in the criminal c:omplwnt. Mr.
Raj-aratnam did book return tickets from Geneva to New York-a fact strikingly at odds wtth its
flight theory.
5
!Hr. Rai;tratnant
1
s lntent To Defend Against tbe Charges
4
During the CX;t()ber 16, 2009 prc,cntment hearing, the Govem.n1enc so.ggested. without
elaboration, tha.t Mr. Rnjaratnam ulny a danger to the community. Such n charge should not
be made by the Government without SJ..ttn>tantial foundation, and it offered nOlle. Nor could it
The- intimatJon is utterly in aoy factual As the Government itself acknowledges,
Mr. Rajnratnam hns no criminal histQTy of any kind. And he has demonstrated for year.-, bis
commitment to helpjng the neediest m his communily.
s The I.;'Omp.t.ain.J. also Stat"s. thatMr. Ra)arat.mun placed a caJJ to a f.runily. member at :H)()
a.m. on the morning oflJis n1ecall was to his d.llughter, who had mistakenly diaJcd Mr
Rajruatnam from her cell phone- while away at around the same time.
5
\KI.'! ld \11'
s T H ; \ ' '-i S' f I 1\ I . E R s. F E I. f') I l I'
------ """'"'
Hon. F'rtmk Mans
Octob<.:r 29. 2l)Ot}
ra,ge6
DUling the Octoher 16, 2009 presen{mcnt the Government n;:pcatcJly argul.?'d tlwt
1\k Rnjamtnam ' s risk of fJight was l;ecause.o C the purported strength Uf the DovenHnt' nt 's
t: .rsc fhat ground lor dctcution ftu ls as well. fbis at its earl:i,est
Ovveutrucnt tlnt.yer ba.vc the critical intbrmufizyn that wiH pla:oo Its curc'elit a118gations in thl:
pwpcr context and dtspd a11yallegathm ofcriminn.l conduct,
6
M<,>reover, the.,trcngth of'thc
GQvemn'l.ctH 's cvidenee
5
which relies hen'Vily on a sit181e coopernting widely reponed to
be Roorny K.hMl has assail.ed. in a senoo o'1:'ecent urticl\?S published ih the New Yor.k
and Wa/i Stnu!$ lnvc.,-ttigative have t;epo1tcd ihut M.s. Khan not only is a
convi(:te<l felon, but .nloo was adjudir..at<:d by tt COllrt ii.t Aug_ust 2009 to have ut:bticated
lor a court proceeding. Sea Alex Berenson; "Fitlili\Cial Woes Galleon. Nt>l '-
><Jrk Time; (Oct. Don Ctark, ''!tlleged lltfonnant Had tliStory Galleon."
Sm:at Jomrwl (Oct. 2009). None fatts \tCrc disclosed to-the Court in the
critr1inal complaiqts. faets which <;crtainl y wnuldfutveca.lled into ques noo
of Lhe Go\ cnu.nent's case at the inilia.l ptcsentmcnf. Rajaratmun is oonfklcnt that.
when all tbc relevant faets come to light, he will be exonerated. Far tl"om intending to free, Mr.
Rajaratnam looks 1orwnrd 1:0 dqfcndmg himself and c<mecting the ntlstaken atld
allegations against him.
Regut-st (or Reduced Bail :md Modified Release Conditions
.. ;
For the reasons, Mr. Rajaratn.tm 's current pre-trial release cond1tions are mon:
onerous than neces.!'ary to <m!lurc his appcMance at lrial. Mr. Ra)urutnam therefore respectfully
that hi personal recognizance bond be reduced to $15 milhon, secured by$ I 0 mtllioo
in property or cash. and A secured botld in this amount is n10re than s ufficient io
ensure Mr. Rajara1nam 's app.cacance at trial and. exceedsUlc; a.mou..nt of bonds rn
nmch more serious c-..uses. For Bc:mard Madoff- who. bad already confessed to
defrauding of more that1 $18 billion, and who faced clt:trges that coutd, ru'ld result
i1l the equivalent of a Life scnteuce - was released before trial on a SlO million bond. n
contrast to Mr. Mr. Rajatat:nam is accused ofil1sider trading that resulted in alleged
gains of$16.829 millioll,
7
and faces charges thai t.""Quld resultj even by the Govcmment's own
rcck<>tting. in no more than a ten-year sentence. lndee.d, Magistrate Judge eaton specifically
nQted, in imlially s.cttjng bail l.7()ndition>' that, thmldy, if the. pretrial officer reports that
everything is going very welt then I think it w1mtd be 1ogicnl to rctum a bit of tht! I r
6
For example. the Gqvemment did uc)t serve Gal loon with a subpoena for records until
Oclober 26, 2009.
'See Crimin.al Compl. 130, 39. 53(m), 6 f{l).
6
,\ l N C.1 ll M l.,
., H ,\ t ' s s H \ n r-;_ H F P t o 1.1 ,.
llorL rrank Maas
October 29,2009
Page 1
38;5- I 0. Mr.. kas t:uoperatcd fully with the Supen is10n Offilw"t:t and
infe11ds to cont1nue tD be fulty cooperaLiV gc;ing forward.
Mr. R.i.ljamuuun J\lsn rl'(llii.:StS that the Court ami!J\d the restrictions on his 111
pcnmt him 10 lrnvcl wi(hin tho c.ontinental U1tited Currently, Mr. R:tjaratnam 's
are to witHin 110 mtle;) from New York City. a limitation 1hat wa..<'>
in pnrt to him to vis.it hh ililtJghter m coHeg,o. Thiit strict limitation is
givoo M1: Rajuratmtm the United and the New York area. More
this restriction Mr. Rajarama.m fron1 travelling to visit l.md.crsignc.-d
whose prlnctpal offices ilre in Wasnillgfon. 'DCI Md Mr. RaJa.r!ltnam from
aCcOmpanying his wife 011 t6 hereJdctly purcnts, who Hw in Maryland, Ill addition, Mr.
Rajaralnam is oonsidt!ring a rulmbt:r of possible bus\JlCSS options m c.o.nnection with the wind-
down Clf indlldittg < potentiai ad}qisiljon of e .lllleon by other int<:rested pnrties lhat
could for many GaJ leon Mr. wquld be better able to
Galleon, iis invc.'ltors, and its t:rtlpfoyees if hewett! pemtiHc-d co meet wi1h potential a\XIuirers
anywhere witJtitl the continental' United Smt(.'S.
Based on the foregoing, Mr. Rajata1nam is tl!lly willin& able., attdn1otivate<J to report to
C:ovrt as requested in o'rdel" to defend hirn$elf and h.e pose11 no risk of or any otber concern
wammfing the eutrcnt bail oon<titions. Accordingly,. we respectfuUy request fllilt his baH
be modified by n;U:ucing the bond to $25 mtHion an.d him to traveJ within
fhc (orry-eight contfgtJt'5US or such other l essel'p.'l l itions thtt Your Honor daems
8\1propri alc. / \
{ . lly1ubmitted,
{
7
In The Matter Of:
UNITED STATES OF AMERICA v.
RAJ RAJRATNAM
November 5, 2009
HEARING
Original File 9B5KRAJH.txt, Pages 1-ll
Word Index included with this Min-U-Script
\
UNITED STATES OF AMERICA v.
RAJ RAJRATNAM
(1]
(2]
(31
r 41
151
161
171
{8)
19]
{ 10]
(11]
(12)
( 13]
114)
(151
1161
117)
[ 181
(l!>J
(20]
( 21)
{12)
( 231
!24 I

(1)
121
131
141
(5)
(6)
[11
181
[9)
( 10)
lUI
! 121
{131
[14)
[ 15]
[161
(l?l
(181
[19!
1201
{21)
[221
123)
[24 1
[25)
9B!>K.P.l\Jll
UNIT&D STA'tES DISTRICl' COURT
SOUTHERN DISTRI CT OF NEl-l YORK

UNlT0 STATr.S OF AMERICA,
Page 1
'1 . 09 MAG 2 30 6 {THK)
Defendant .
------------------------------Y.
NP.'-< Yo:ck, N.Y.
5, 2009
2: 45 p. m.
Before:
HON. THEODORS H. KATZ ,
Magi trate Judge
APP&l\P.ANCES
l?REET
United States for the
Di strict o! ,ew _
JONATHAN STREE'I'E.R
ANDREW MICHAELSON
Assistant United Attorneys
AKIN GUM!? STRAUSS l'.AUER & FELD
J OHN for Defendant
ROBRT H. ROTZ, JR.
(In open court)
( Case calle d)
Page2
t'.P. . DOWD: Good afternoon, your nonoT. John Dowd
f or Mr.
THE COURT : Good afternoon.
MR. DOWD: .!'ve come before you today to seek
modiflcat i on of a ball that was set 1n order to reasonably
a$a ure his respectfully t hat the
restuctions and the $100 million bond are unnecessary an<:!
And I'd l1ke to JUSt make a f e w poi ,,ts- 1n addition
to what the letter we sent to you co vered.
We sugges t . your Honor t qovcrnmGnt simpl y fail@d
to the eno.r:-tn.Ous bon.oj end the travel reat ricti. ons wher e
tGexe's no risk of flight . has and
deep ties here :in New York, i tl his holdings, and his busines, ,
and there are soMe s i gnificant deficencLes >n t he
complaint before the Court.
First o'! all, ycur Honor, he ' s no risk of fliqht J He
nas extensive ties in chis city and the country, wt th nis
fam.\ly. lie takes c are o f !)is a.t ling here in New YoLk.
His children school in New Yor k hare. He nos
exten$ive real estate and business holdings here i n the city;
and loyal tc all of them. He's been a good and
contxibutinq cici:z.en to this count r y and the city, and has no
pnor C.Hrninal history. 1\is business , which i s his extended
Novembex, S, 2009
Page 3
ttl family, Galleon, and its 129 employees, he's been very loyal to
121. them.
t JJ Your Honor, when be was released on October 16th,
1 1 first thing he did is that all the Galleon documents ano
r:s1 records be preserved. In addition, instead of freezing the
!61 assets of the company to protect himself, he'd been winding
111 down and liquidating without fee, and with the
taJ assistance of counsel to pTotect the investors, the vendors,
t9t and his employees in these difficult c ircumstances. In fact,
rtoJ he's trying to sell the company so that the 129 employees will
1111 not lose their jobs.
tl2J Let me now turn to the criminal complaint, your Honor.
l t3J We now know that Judge Eaton did not know that the complaint
11 1 was lodged under oath without the critical contemporaneous
!lSJ trading records of Galleon, where all of these transactions
ntSJ took place. These contemporaneous records are at the heart and
1111 soul of this case, the trading records, the analyst reports,
(I BJ all the communications surrounding these trades and the trading
! 191 positions of Galleon. They have never been sought by the
1201 government until a few days after the arrest, and a graad jury
r211 was subpoenaed -- was issued to the company, a fact not
t221 disclosed to Judge Eaton.
1231 THE COURT: Well, did they rely on them in making an
12 1 argument before Judge Eaton?
2:SJ MR. DOWD: Well, your Honor, if you re.ad the
p
111 complaint, it appears they were relying on trading records,
121 etcetera, but there's no indication, and they did not have the
tJJ Galleon records. It was not pointed out tbat Galleon was
11 voluntarily registered with the SEC; !Uld, indeed, the SEC
rs1 conducted an audit in 2007 of Galleon and its records. All I
61 suggest, your Honor, is that the complaint is not as
PI overvvhelming and compelling as the government would like the
!81 magistrate to believe, because--
t!ll THE COURT: Well, that's not really the issue today.
1101 MR. OOWD: Well, one of the issues was the strength of
tll l the complaint, that they --
11.2 1 THE COURT: Well, Judge Eaton made decisions about
tUJ bail; he didn't detain the defendant. You're seeking a
ru1 modification, correct?
t1s
1
MR. DOWD: That's correct, your Honor.
1161 THE COURT: And what's changed?
( 1.71 MR. OOWO: \Vhat has changed is that-- Mr. Rajaratnam
[1a1 has behaved in a most lawful way, and I just want the Court to
ttl< I know that; with respect to these records, the employees, and
20J other people. And he's a different person than was portrayed
!2Ll to the Court before Judge Eaton. In addition, your Honor --
1221 IHt= COURT: Were you at the bail hearing?
1231 MR. DOWD: No, I was not, your Honor, but I read the
124 1 record --
!25 1 THE COURT: But he was represented?
HEARING Min-U-Script (1) Page 1 - Page 4
UNITED STATES OF AMERICA v.
RAaJ RAJRA TNAM
(1)
12 1
\3)
(4)
151
(6)
111
[8)
(9)
( 10)
(Ill
(12)
(131
lUI
Jl ! l
(1(1)
(17)
1101
119)
(20)
[21)
122)
[23)
[ 24 )
(2!)
PageS
MR. Jl)OWir. !k'WM represented, your Honor, but be had
about ten minutes with counsel. And he didn't really ha' e an
opportunity to lay all these facts before the Court
So, y0ur Honor, I would ask,. u1 addition to the
crinuoal complaint, in footnote 1 of paragraph 10 on page 10,
the soura - it was not revealed that the source had a
cnminal conviction, it was not revealed that the source had
also fabricated evidence before a U.S. District Court in August
of2009. All rm saying is, there's an issne about the
credil)iljty o f this complaint. But I just want you to know
that from his standpoint, be's not going anywhere. Now,
everything is at stake. He's records. We
believe the rerords wilt be powerful and helpful in trying this
case.
What l'd ask you, your Honor, is to give us more
leeway oo the travel restrictions. In addition to coming to my
office in Washington, which would be very helpful, we've got
three cases to try; we're already under way with Judge Rak:off.
And, your Honor, we'd be happy to report, Mr. Santos, who's the
pretrial services officer, has to travel. In addition, it
would be helpful if he bad the ability to travel in the United
States so thac he could help sell- save the business. But
we're happy to report and account where he's going, why be's
going, etcetera.
The only other point rd suggest, your Honor. is I
PageS
111 just thmk I 00 1IUlhon is too much; it's oot necessary for this
121 defendant, with all the ties that he has hero. I'd ask your
131 consideration on that point.
rl THE COURT: I mean he bas posted the security for the
lSI bond?
16J MR. OOWO: He has posted the security, your Honor.
l7l But given the fact that he's out of business, there's an awful
tal lot of cash there that could be helpful in taking care of
t91 liabilities. Your Honor, he is responsible for all tlle
1
1o
1
liabilities of- and he's trying to meet them all in Galleon.
1
u1 He doesn't want anybody to lose a nickel for this. He's not
1
12
1
taking any fees, he's not taking anything for himself; be's
llll trying to protect - so there's $2-l/2 million cash in this,
1
u1 and I'd ask your Honor for consideration and some relief in
t15l that department.
1
u
1
THE COURT: Thank you.
1111 MR. DOWO: Your Honor, I want to mention something
1
1e1 else the government rajsed about the investment in Sri Lanka.
!19l We really don't want rhe Court to be concerned about that
1201 First of aU, your Honor, tho vast majority ofthat is in stock
1211 in a public company, and we're happy to comrmt to the Court and
1221 the pretrial services officer that that's a long-term
!231 investment that will not be disposed of. And if there's a need
tzc
1
to dispose of it, we'll come to the Court fust and ask for
r2s
1
pemtission to do so. So there's not 25, 30 million dollars
{1)
121
{31
((J
l SI
161
(1J
[9)
{9)
1101
[11)
(121
(13!
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(161
[17)
[18)
(19)
1201
{211
122)
{2))
{ 241
[25)
November 5, 2009
Page 7
worth of cash. And what cash he has in Sri Lanka, he's
bringing back here to help pay the vendors and other people the
obljgations at Galleon. The balance will be stock on a public
company but I want your Honor to know, 1 don't want anybody to
be concerned that it's some fund over there that he could use
to escape. He's not, and we're happy to be transparent about
it and offer that
THE COURT: OK, thank you.
MR. DOWD: Thank you, your Honor.
MR. KLEIN: YourHonor-
THE DEPUTY CLERK: lden.tify yourself.
MR. KLEIN: Your Honor, Josh Klein on behalf of the
government Also seated at counsel table are Andrew Michaelson
and John.athan Streeter from the U.S. Attorney's Office, and
B.J. Kang from the FBl. Good afternoon, your Honor.
THE COURT: Good aftemoon.
MR. KLEIN: Your Honor, I just want to clarify a
couple of things that defense counsel Jed with.
First, we did have trading records that we obtained
from Galleon's client broker. Second, with respect to the SEC
audit, that was the audit that uncovered the instant message
from a cooperating witness to the defendant that said something
to tile effect of, bold off on PLCM - which is the symbol for
'Polycom, one of the stocks charged in the complaint -until!
get guidance. And we actually reference that [M --I don't
PageS
111 believe we indicate where it was obtained but we reference that
121 IM in the complaint.
Ill With respect to the change of circumstances, we point
tc 1 out in the government's brief the only change of circumstance
!51 is the fact that Galleon, the defendant's company, is now being
161 wound down. And whatever the defendant may or may not be doing
PI vis-a-vis Galleon's employees, to the extent that he refers to
111 Galleon as perhaps his life's most important work, or something
IPJ to that effect, in his Jetter, that entity is being bound down.
uoJ Any ties that the defendant has to New York, by virtue of
1111 Galleon, are being unwound and are bemg weakened rathef' than
1121 So in terms of a change in circumstance, if
llll anything, we believe that the change in circumstance would
tu 1 militate a strengthened ball package, not any reduction in the
tl5l bail.
11,1 With respect to- I don't want to be repetitive of
1111 what's in the brief; ru just touch upon it very quicldy.
11e1 With respect to the defendant's ties to Sri Lanka, they go far
1191 beyond the 25 to 35 million dollars in the account that was
1201 referenced. He's reported in the press to be one of the
1211 biggest, if not the biggest, stakeholder in at least one or two
1221 of the biggest conglomerates in Sri Lanka. He was born and
I2JI raised there. He has, according to the pretrial services
12" report, aunts, uncles, cousl.OS there. In tenns of his
!251 international ties and this is also indicated in the
HEARING Min-U-Script {2) Page 5 - Page 8
UNITED STATES OF AMERJCA v.
RAJ RAJRATNAM
P<;lge9
1 tJ pretrial services report - they are much broader tl1an just
121 ties to Sri Lanka. There's extensive international travel.
l-'1 He's admitted to the FBI post arrest that he owns property
111 abroad, in Singapore, the U.K., Canada, etcetera.
cs1 So we beJieve that tho fact ofrhese connections
161 overseas create the opportunity for flight. We believe the
m defendant's resources, which are reported as between 1.3
ttl b11lion and 1.8 billion, are cnonnous. And we believe that the
ttl strength of the case is extremely strong.
uo1 talking about a case that is built around not only the trading
(ltl records and telephone records that often comprise the core of
1121 evidence in an insider trading case, but we also have
1u1 cooperators; and, most importantly, we have the consensual
1< 1 recordings and the wiretap recordings that stretch over a
(151 period of many mol\ths tmd Lhat capture the crimes as they were
1161 unfolding.
t>7J And so the government's position, your Honor, as we
n1 indtcate in the bnef, is that there's no basis for any
1191 reduction in the bail package; there's no change of
1201 circumstance that warrants any sort of di.mjnution in the bail
1211 that was set by Judge Eaton.
1221 THE COURT: Well. lei me understand why you would have
1231 concerns with his being able to trdvel to Washington to consult
121 with his attorney.
12sJ MR. KLEIN: With respect t.o travel , your Honor, we
Page 10
111 would like the opportumty to object, depending on lhe
c21 information that we have and co the extent thal your Honor
wants to order modification that would require the defendant to
11 let us know in advance of travel, where the travel is going to
151 take place and the period of travel, give us the contact
61 information -- and if we get that infonnation in advance of the
111 travel, such that we have an opportunity to object, we don't
lSI oppose a package outlined along that framework, as opposed to
191 having to come to the Court in every instance. So I don't k.now
1101 that there is an objection in every instance to travel, but we
uu want to know, and we want an opportunity to object.
m1 THE COURT: Do you have any problem with that?
Ill I MR. KLEIN: No, your Honor, we don't
tlfl THE COURT: It seems to me it's a reasonable request.
1151 r don't think Judge Eaton meant to preclude it. And certainly
ru1 as long as Mr. Rajaratnam advises pretrial services in advance
em where he intends to travel within the United States-
1111 MR. DOWD: Yes, your Honor.
ru1 THE COURT: --when he mtends to travel and for what
1201 reason, if necessary, if they want to see his airplane
tickets-
1221 MR. DOWD: Certainly, your Honor, absolutely no
problem there, none at all .
c2t1 THE COURT: So f'll modify the bail to pennit that.
t2s1 I don't really see a reason to revisit the monetary
lll
121
l31
141
IS!
!51
[?)
181
191
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1191

1211
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[24 J
(251
November 5, 2009
Page 11
amount Judge Eaton, as l recall, said two weeks ago that
maybe in the end of November, if things are looking OK, one way
or the other, he might be willing;to reconsider. But a.s I
uuderstand it, the cash is $2-112 million, the rest is posteu
securitY and property; is that right?
MR. DOWD: That's correct, your Honor.
THE COURT: So I don't see any reason modify that
bail at this point. But I will modify the conditions of travel
.for purposes of consulting with you and for business, if he
gives advance notice, advises pretrial why he's going, where
he's going, and if they want to see airplane tickets--
MR. DOWD: We'll provide the contact informacion also,
your Honor, certainly happy to do that.
THE COURT: Anything else on this application?
MR. DOWD: No. Thank you very much.
MR. KLEIN: Thank you, your Honor.
THE COURT: You're welcome.

\
HEARING Miu-U-Scrip t (3) P-age 9- Page 11
UNITED STATES OF AMERICA v.
RAJ RA.JRATNAM November 5, 2009
__.:::::...:;:::::::..:::::..:..:::::.:__--r ______ --,-------.-----"-----,-- ----=--
back 7:2
$ bair 4:13,22;8:
---------l 20;l0:24;11:8
$2-112 6.1 3; 11:4 balance 7:3
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1 5:5 beyond 8: 19
1.3 9:7 biggest 8:21,21,22
1.8 9:8 billion 9.8,8
10 5.5,5 BJ 7: 15
100 6:1 bond 6:5
3: 1, 10 born 8:22
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2 bringing 7:2
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2007 4:5
2009 59
25 6:25;8:19
3
broker 7:20
built 9:10
busine ss 5:22;6:7; II :9
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conviction 5:7
cooperating 7:22
cooperatMs-9. 13
1-----------i instance 10:9,10
F instant 7:21
1----------1 instead 3.5
core 9: ll fabricated 5:8
counsel 3:8;5:2;7: 13,18 fact 3:9,21;6:7;8:5;9:5
couple 7:18 facts 5:3 -
Court 4:18,21;5:3,8;619, family 3:1
21,24; 10:9 fa r 8: 18
COURT 3:23;4:9, 12,16, FBI 7: 15;9:3
22,25;6:4,16;7:8,16,9:22; fee 3:7
10: 12,14,19,24; I 1:7, 14, 17 fees 6. 12
cousins 8:24 few 320
create 9:6 first 3:4;6:24
credibility 5.10 First 6:20;7: 19
crimes 9:15 fl ight 9:6
criminal 3:12;55,7 footnote 5:5
critlcal3: 14 framework 10:8
f----------j freezing 3:5
D fund 75
days 3:20
decisions 4:12
G
intends 10:17,19
international 8:25;9:2
investment 618,23
investors 3:8
issue 4.9;5:9
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issues 4IO
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Galleon's 7:20;8:7
given 6:7
Kang 7. 15
Klein 7: 12 30 625
35 8: 19
Canada 9:4
capture 9: 15
care 6:8
A case 3: 17;5:14,9:9,10,12
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ability 5:21 cash 6:8, 13;7: 1,1; II :4
able 9:23 certainly 10: IS; I 1: 13
a broa d 9:4 Certainly I 0:22
absolutely 10:22 cetera 4:2;5:24;9:4
according 8:23 change 8:3,4,12,13;9:19
account 5.23;8: 19 changed 4:16,17
actually 7:25 charged 7:24
addition 3:5;4:21 ;5:4, 16, circumstance 8:4,12, 13;
20 9:20
admitted 9:3 circumstances 3:9;8:3
advance 10:4,6,16;11: 10 clarify 7: 17
advises 10: 16;11:10 CLERK 7: 1 I
afternoon 7:15,16 client 7:20
ago 11:1 coming 5:16
airplane 1 0:20; 1111 commit 6:21
along I 0:8 communications 3: I 8
amount 11.1 company 36,10,21;6:21;
analyst 3: I 7 7:4;8:5
Andrew 7: 13 compelling 4:7
appears 4: 1 complaint 3: I 2,13;4:1 ,6,
application II : 14 l I ;5:5, I 0;7:24;82
argument 3:24 comprise 9:1 J
around 9.10 concerned 6:19;7:5
arrest 3:20;9:3 concerns 9.23
assets 3:6 conditions II :8
assistance 3:8 conducted 4:5
attorney 9:24 conglomerates 8:22
Attorney's 7: 14 connections 9:5
audit4.5;7:21,21 consensual 9:13
August 5:8 consideration 6:3,14
aunts 8:24 consult 9:23
awful 6:7 consulting II :9
=.:..::.:.....:..:..:..._ _____
1
contact 1 0:5; II : 12
B contemporaneous 3:14,
16
HEARING
8:6, 1 0; 10:3
defendant's 8:5,1 8;9:7
defense 7: 18.
department 6: 15
depending I 0:1
OEPUTY 7:11
detain 4:13
gives 11:10
Good 7:15, 16
government 3:20;4:7;
6:18;7: 13
government's 8:4;9:9,17
grand 3:20
guidance 7:25
H
KLEIN 7:10,12,17;9:25,
10:13;1 1:16
L
lanka 6: 18;7: 1 ;8: 18,22;
9:2
lawful4: 18
lay 53
least 8:21
led 7:18
different 4:20
difficult 3:9
diminution 9:20
disclosed 3:22
dispose 6:24
dis posed 6:23 1----------1 leeway S: t6
Dls1rict 5:8 happy 5: 19,23;6:21 ;7:6;
documents 3:4 11: 13
dollcll'$ 6:25;8: 19 hearing 4:22
DOWD 3:25;4:l0,15,17, heart 3:16
23;5:1;6:6,1 7;7:9;10: 18, help 5:22;7:2
22; 11 :6,12, 15 helpful 5:13, 17,21;6:8
down 3:7;8:6,9 himself 3:6;6:12
1-----=--...:.....----1 hold 7:23
E Honor 3:3, 12,25;4:6, 15,
1-------------1 21,23;5: I ,4, 15, 19,25;6:6,9,
Eaton 3:13,22,24;4: 12,21; 14,17,20;7:4,9,10,12,15,
9:21;10: 15; I I :1 17;9: 17,25;10:2,13, 18,22;
letter 8.9
liabil ities 6:9,10
life's 8:8
liquidating 3:7
lodged 3: 14
long 10:16
long-term 6:22
looking II :2
lose 3:1 1;6: 1 I
lot 6:8
loyal 3:1
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else 6:18;11 :14 .t-
1
--'---"------"1---------
employees 31,9,10; I magistrate 4:8
4: 19;8:7 1------ - --- ---i majority 6:20
end 11 :2 Identify 7:11 making 3:23
enormous 9:8 IM 7:25;8:2 many 9:15
entity 8:9 important 8:8 may 8:6,6
escape 7:6 importantly 9:13 maybe II :2
et 4:2;5:24;9:4 indeed 4:4 mean 6:4
evidence 5:8-;9: 12 indicate 8:1 ;9: 1 8 meant 10: IS
extenstve 9:2 indicated 8:25 meet 6: I 0
extent 8:7;10:2 indication 4:2 mention 6.17
extremely9:9 information 10:2,6,6; message 721
I I: 12 Michaelson 7 13
inslder 9: 12 might I 13
Min-U-Script (1} $2-1/2- might
UNITED STATES OF AMERICA v.
RAJ RAJRA TN.AM:
militate 8:14 person 4:20
milli on 6:1,13,25;8 19; place 3: lli; lO:S
l1 :4 PlCM 7:23
minutes 5:2 point 5:25;6.:3,8:3; 11 :8
modification 4: 14; 10:3 pointed 4:3
modify 10:24; 11:7,8 Polycom 7:24
monetary I 0:25 portrayed 4:20
months 9:15 position 9:17
more 5:15 positions 3: 19
most 4. 18;8:8;9:1 3 post 9:3
much 6: 1;9: 1; 11: 15 posted 6:4,6; II :4
powerful 5:13
N preclude 10: IS
preserved 3.5;5: 12
necessary 6: I; 10:20 press 8:20
need 6:23 pretriai 'S:20;6:22;8:23;
New &IO 9:1, 10:16;1 k i O
nlcke16: 1 1 problem I 0: 12,23
none 10:23 property 9:3; I I :5
notice 11:1 0 protect 3:6,8;6: 13
November I I :2 provide 11:12
0
public 6:21;7:3
purposes 11 :9
oath 3: 14 Q
object 10:1,7,1 1
objection 1 0:10 quickly 8: 17
obligations 7:3
R obtained 7: 19;8: 1
October 33
off 7:23 raised 6: 18;823
offer 7:7 Rajaratnam 4: 17; 10: 16
office 5: 17 Rakoff 5: 18
Offlce 7:14 rattler 8: II
officer 5:20;6:22 read 3:25;4:23
often 9:11 really 4:9; 5:2;6: 19; I 0:25
OK 7:8;11 :2 reason 10:20,25; 11:7
one 4: I 0;7:24;8:20,fl; reasonable 10: 14
11 :2 recall I 1: 1
only 5:25;8:4;9: I 0 reconsider II :3
opportunity 5:3;9:6; 10: 1, record 4:24
7, 11 recordings 9:14,14
oppose 10:8 records 3:5,15, 16,17;4: 1,
opposed I 0:8 3,5, 19;5 12,13;7:19;9: I 1,
order 34; 10:3 I 1
out 4:3;6:7;8:4 reduction 8: 14;9: 19
outlined 10.8 reference 7:25:8: 1
over 7:5;9: 14 referenced 820
overseas 96 refers 8:7
overwhelming 4:7 registered 44
owns 9:3 released 3:3
relief 6.14
p
rely 3:23
relying 4: 1
package 8: 14;9: 19; 10:8 repetitive 8: 16
page 5:5 report 5: 19,23;8:24;9: I
paragraph 5:5 reported 8:20;9: 7
pay 7:2 reports 3: 17
people 4:20;7:2 represented 4:25;5 1
perhaps 8:8 request 10: 14
period 9: I 5; 10:5 require I 0:3
permission 6:25 resources 9:7
permit 1 0:24 respect 4: 19;7:20;8:3,16,
HEARING
November S, 2009
18;9:25 travel 516,20,21;9:2,23,
responsible 6:9 25; 10:4,4,5,7,10,17,19;
rest 11!4 I I :8
restrictions 5:16 try 5:18
\.
revealed 5:6,7 trying 3: 10;5:13;6 10,13
revisit 10:25 turn 3: 12
right J 1:5 two 8:2J;ll: l
s u
Santos 5:19 UK 9:4
save 5:22 uncles 8:24
saying 5:9 uncovered 7:21
seated 7: 13 under 3:l 4;5: 18
SEC 4:4,4;7:20 unfolding 9:16
Second 720 United 5:21 ; 10: 17
security 6:4,6; 115 unwound 8:11
seeking 4: 13 upon 8:17
seems 10:14 use 7:5
seli 3: IO;S22
services 5:20;6:22;8:23;
v
9:1; 10:16
set 9:21 .. vast6:20
Si ngapore 9:4 vendors 3:8:7:2
sort 9:20 virtue 8: 10
sought 3: 19 vis-a-vis 8:7
soul 3: 17 voluntarily 44
source 5:6,6, 7
w Sri 6: 18;7 1 ;8: I 8,22;9:2
stake 5: 12
stakeholder 8:21 wants 10:3
.
standpoint 5: II warrants 9:20
States 5:22; 10: 17 Washington 5:17;9:23
stock 6:20; 7:3 way 4: 18;5: 18; 11 t2
stocks 7:24 weakened 8: 11
Streeter 7: 14 weeks 11:1
strength 4: 1 0;9:9 welcome 11 17
strengthened 8: 12, 14 what's 4:16;8: 17
stretch 9: 14 who's 5 19
strong 9:9 willing I 1 :3
subpoenaed 3:21 winding 3:6
suggest 4:6;5:25 wiretap 9: 14
surrounding 3: 18 within 10: 17
symbol 7:23 without 3:7,14
witness 7:22
T work 8:8
worth 7:1
table 7:13 wound 8:6
talking 9:1 0
telephone 9: I I
y
ten 5:2
terms 8: 12,24 York 8:10
three 5:18
tickets 10:21;11:11
ties 6:2;8: 1 0, 18,25;9: 2
today 4:9
took 3 16
touch 8:1 7
trades 3:18
trading 3: 15,17, 18;4: 1;
7: 19;9: 10,12
transactions 3: 15
transparent 7:6
Min-U-Script (2) militate - York
AU
DEFENDANT'$
o DETENTION 0 CONSENT ICE '
D HE:'\lM,JiilG AT
0 A<SRqEO .. BAIL
.o l . . : .. ;
0 FRP
0 (JA
. $ ,."' , .. CASH/PROPERTY:. _______________________ _
p TO SDNY/EDNY/ _______________ _ ____ _
f? DOCUMENTS (& NO NEW APPfiCATfONS)
.0 R. . P STRICT PRETRIAL 0 DRUG TESTING/TREATMENT
,0 !(;.;i 0 HOME DETENTION 0 CURfEW 0 ELECTRONIC MONITORING:
C:0 '.:, . _ _....:_ _________ ...._... _ __,.. _________ _
0 D.E'Fi;NOANT TO 8J; RELEASED UPON FOLLOWING COrNDiTIONS:
FOR RULE 40 CASES:
0 ID HEARING \Y('IVED
0 DEFENDANT R,EMOVED
DATE FOR PRELIM!
COMMENTS PROCEEDINGS:
0 PRELIMINARY HEARING WAIVED
0 ON DEFENDAN.T'S:E:ONSENT ...
, .. .
0 ON DEFENDANT'S CONSENT
UNITED MAGI
SOUTHERN DISTRICT OF
f! NK- U.S. ATTORNEY'S OFF!Cf . YELLOW- U.S. MARSHAL fililli- PRETRJAL SERVICES AGENCY
,. .
Approved :
Ass istant states
2
3 0 6
ANDREW MICHAELSON . 't'
Special Assistant United States Attorney
Before: THE HONORABLE DOUGLAS F. EATON
United States Magistrate Judge
Southern Di strict of New York
- - -- ------ ---- ---- X
UNITED STATES OF AMERICA
COMPLAINT
Violations of
-v. -
RAJ RAJARATNAM,
RAJIV GOEL, and
ANIL KUMARI
Defendants.
SOUTHERN DISTRICT OF NEW YORK, ss.:
X
18 u.s.c. 371;
15 u.s.c. 78j(b},
78ff; 17 C.F. R.
240.10b-5 and
240.10b5-2
COUNTY OF OFFENSE:
NEW YORK
B. J. KANG, being duly sworn, deposes and says that he
is a Special Agent with the Federal Bureau of Investigation and
charges as follows :
COUNT ONE
(Conspiracy)
1. From at least in or about January 2006 up to and
including in or about July 2007, i n the Southern District of New
York and elsewhere, RAJ RAJARATNAM, the defendant, and others
known and unknown, unlawfully, willfully, and knowingly did
combine , conspire, confederate and agree together and with each
other to commit offenses against the United States, to wit,
securities fraud, in violation of Title 15, United States Code,
Sections 78j (b) & 78ff, and Title 17, Code of Federal Regulations,
Sections 240.10b-5 and 240.10b5- 2.
2. It was a part and object of the conspiracy that RAJ
RAJARATNAM, the defendant, and others known and unknown,
unlawfully , willfully and knowingly, directly and indirectly, by
the use of the means and instrumentalities of interstate commerce,
and of the mails, and of facilities of national securities
exchanges, would and did use and employ, in connection with the
purchase and sale of securities, manipulative and deceptive
devices and contrivances in violation of Title 17, Code of Federal
Regulations, Section 240.10b-5 by: (a) employing devices, schemes
and artifices to defraud; (b) making untrue statements of material
fact and omitting to state material facts necessary in order to
make the statements made , in the light of the circumstances under
which t hey were made, not misleading; and (c) engaging in acts,
practices and courses of business which operated and would operate
as a fraud and deceit upon persons, all in violation of Title 15,
United States Code, Sections 78j (b) and 78ff, and Title 17, Code
of Federal Regulations, Sections 240.10b-5 and 240.10b5 -2.
Overt Acts
3. In furtherance of the conspiracy and to effect the
illegal objects thereof, the following overt acts, among others,
were committed in the Southern District of New York and elsewhere:
a. On or about January 9, 2006, an individual who
subsequently became a cooperating witness (the "CW") sent the
following instant message to RAJ RAJARATNAM, the defendant, in New
York, New York: "donot [sic] buy plcm till i het [sic] guidance;
want to make sure guidance OK."
b. On or about January 12, 2006, in New York, New
York, RAJARATNA!1 caused the Galleon Technology Funds to purchase
approximately 60,000 shares of Polycom, Inc., which traded under
the symbol "PLCM."
c. On or about July 3, 2007, in New York, New
York, RAJARATNAM caused the Galleon Technology Funds to purchase
approximately 400,000 shares of Hilton Hotels Corp., which traded
under the symbol "HLT."
d. On or about July 17, 2007, in New York, New
York, RAJARATNAM caused the Galleon Technology Funds to purchase
approximately 1,000 put options in Google, Inc . , which traded
under t he symbol "GOOG
1
rt and to short approximately 25,000 shares
of Google stock.
(Title 18, United States Code, Section 371.)
2
COUNT TWO
(Conspiracy)
4. From at least in or about March 2008 up to and
including in or about October 2008, in the Southern District of
New York and elsewhere, RAJ RJ1.JARATNAfv1 and RAJ I V GOEL, the
defe ndants, and others known and unknown, unlawfully , willful l y ,
and knowingly did combine, conspire, confederate and agree
t oget her and wi th each other to commit 'offenses against the United
. States/ to wit , securities fraud, in violation o f Title 15, United
States Code, Sections 78j(b) & 78ff, and Title 17, Code of Federal
Regulations / Sections 240.10b-5 and 240.10b5-2 .
5. It was a part and object of the conspiracy that RAJ
RAJARATNAM and RAJIV GOEL, the de(endants, and others known and
unknown, unlawfully, willfully and knowingly-, directly and
indirectly, by the use of the means and instrumentalities of
interstate commerce, and of the mails, and of facilities of
national securities exchanges, would and did use and employ, in
connection with the purchase and sale of securities, manipulative
and deceptiv e dev ices and contrivances in violation of Title 17 ,
Code of Federal Regulations, Section 240.10b-5 by: (a) employing
devices, schemes and artifices to defraud; (b} making untrue
statements of material fact and omitting to state material facts
necessary in order to make the statements made, in the light of
the cin:::umstances under which they were made, not misleading; and
( c) engaging in acts
1
practices and courses of business which
operated and would operate as a fraud and deceit upon persons, all
in violation of Title 15, United States Code, Sections 78j (b) and
78ff, and Title 17, Code of Federal Regulations , Sections 240.10b-
5 and 240.10b5-2.
Overt Acts
6. In furtherance of the conspiracy and to effect the
illegal objects thereof , the following overt acts, among others,
were committed in the Southern District of New York and elsewhere:
a. On or about March 20, 2008, a call was made
from a landline subscribed to RAJIV GOEL, the defendant, to a cell
phone used by RAJ RAJARATNAM, the defendant.
b. On or about March 24, 2008 , in New York, New
York, RAJARATNAM caused the Galleon Technology Funds to purchase
approximately 125,800 shares of Clearwire Corporation
("Clearwire"), which traded under the symbol "CLWR."
(Title 18, United States Code, Section 371.)
3
COUNT THREE
{Conspiracy)
7. From at least in or about July 2008 up to and
including in or about October 2008, in the Southern District of
New York and elsewhere, RAJ RAJARATNAM, the defendant, and others
known and unknown, unlawfully, willfully, and knowingly did
combine, conspire, confederate and agree together and with each
other to commit offenses against the United States, to wit,
securities fraud, in violation of Title 15, United States Code,
Sections 78j (b) & 78ff, and Title 17, Code of Federal Regulations,
Sections 240.10b-5 and 240.10b5 - 2.
8. It was a part and object of the conspiracy that RAJ
RAJARATNAM, the defendant, and others known and unknown,
unlawfully, willfully and knowingly, directly and indirectly, by
the use of means and instrumentalities of interstate commerce, and
of the mails, and of facilities of national securities exchanges,
would and did use and employ, in connection with the purchase and
sale of sec'urities, manipulative and deceptive devices and
contrivances in violation of Title 17, Code of Federal
Regulations, Section 240.10b-5 by: (a) employing devices, schemes
and artifices to defraud; (b) making untrue statements of material
fact and omitting to state material facts necessary in order to
make the statements made, in the light of the circumstances under
which they were made, not misleading; and (c) engaging in acts,
practices and courses of business which operated and would operate
as a fraud and deceit upon persons, all in violation of Title 15,
United States Code, Sections 78j(b} and 78ff, and Title 17, Code
of Federal Regulations, Sections 240.10b-5 and 240.10b5-2.
Overt Acts
9. In furtherance of the conspiracy and to effect the
illegal objects thereof, the following overt acts, among others,
were committed in the Southern District of New York and elsewhere:
a. on or .about July 24, 2008, a co-conspirator not
named as a defendant herein ("CC-1"} called RAJ RAJARATNAM, the
defendant, from New York, New York.
b. On or about July 25, 2008, in New York, New
York, RAJARATNAM caused the Galleon Technology Funds to sell short
approximately 138,550 shares of Akamai Technologies, Inc. stock,
which traded under the symbol "AKAM."
(Title 18 , United States Code, Section 371. )
4
COUNT FOUR
(Conspiracy)
10. From at least in or about August 2008 up to and
including in or about October 2008, in the Southern District of
New York and elsewhere, RAJ RAJARATNAM and ANIL KUMAR, the
defendants, and others known and unknown, unlawfully, willfully,
and knowingly did combine, conspire, confederate and agree
together and with each other to commit offenses against the United
States, to wit, securities fraud, in violation of Title 15, United
States Code, Sections 78j(b) & 78ff, and Title 17, Code of Federal
Regulations, Sections 240 . 10b-5 and 240.10b5-2.
11. It was a part and object of the conspiracy that RAJ
RAJARATNAM and ANIL KUMAR, defendants, and others known and
unknown, unlawfully, willfully and knowingly, directly and
indirectly, by the use of means and instrumentalities of
interstate commerce, and of the mails, and of facilities of
national securities exchanges, would and did use and employ, in
connection with the purchase and sale of securities, manipulative
and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5 by: (a) employing
devices, schemes and artifices to defraud; (b) making untrue
statements of material fact and omitting to state material facts
necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading; and
(c) engaging in acts, practices and courses of business which
operated and would operate as a fraud and deceit upon persons, all
in violation of Title 15, United States Code, Sections 78j (b) and
78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-
5 and 240.10b5-2.
Overt Acts
12 . In furtherance of the conspiracy and to effect the
illegal objects thereof, the following overt acts, among others,
were committed in the Southern District of New York and elsewhere:
a. On or about August 15, 2008, ANIL KUMAR, the
defendant, spoke with RAJ RAJARATNAM, the defendant, on
RAJARATNAM' s cell phone.
b. On or about August 15, 2008, in New York, New
York, RAJARATNAM caused the Galleon Technology Funds to purchase
approximately 2,100,100 shares of Advanced Micro Devices, Inc .
("AMD"), which traded on the New York Stock Exchange under the
symbol "AMD."
(Title 18, United States Code, Section 371.)
5
COUNTS FIVE THROUGH THIRTEEN
(Securities Fraud)
13. On or about the dates set forth below, in the
Southern District of New York and elsewhere, RAJ RAJARATNAM, RAJIV
GOEL, and ANIL KUMAR, the defendants, unlawfully, willfully and
knowingly, directly and indirectly, by the use of the means and
instrumentalities of interstate commerce, and of the mails and of
the facilities of national securities e xchanges, in connection
with the purchase and sale of securities, did use and employ
manipulative and deceptive devices and contrivances, in violation
of Title 17, Code of Federal Regulations, Section 240.10b-S, by
(a) employing devices, schemes and artifices to defraud; (b)
making untrue statements of material facts and omitting to state
material facts necessary in order to make the statements made, in
the light of the circumstances under which they were made, not
misleading; and (c) engaging in acts, practices and courses of
business which operated and would operate as a fraud and deceit
upon persons, to wit, caused the Galleon Technology
Funds to execute the securities transactions listed below in the
securities of (1) Clearwire based on material, nonpublic
information he obtained from GOEL; (2) AMD based on material,
nonpublic information he obtained from KUMAR and CC- 1; (3 ) Akamai,
based on material, nonpublic information he obtained from CC-1;
and (4) PeopleSupport based on material, nonpublic information he
obtained from a source at the company.
couwr DEFENDANT(S) DATE SECURITY TRANSACTION
FIVE RAJARATNAM March 24, Clearwire purchased
GOEL 2008 (CLWR) 125,800
shares
SIX RAJARATNAM March 25 , Clearwire purchased
GOEL 2008 (CLWR) 136,000
shares
SEVEN RAJARATNAM July 25, Akamai sold short
2008 (AKAM) 138,550
shares
EIGHT RAJARATNAM July 29, Akamai sold short
2008 (AKAM) 173,300
shares
6
NINE RAJARATNAM J uly 30, Akamai sold short
2008 (AKAM) 86,650
shares and
purchased
1, 400 put
options
TEN RAJ ARATNAM August 15, AIIJD (AMD) purchased
KUMAR 2008 2,100,100
shares
ELEVEN RAJARATNAM August 18, AMD (AMD) purchased
KUMAR 2008 2,800,100
shares
TWELVE RAJAP.A TNAM September AMD (AMD) purchased
KUMAR 30 , 2008 375,000
shares
THIRTEEN RAJARATNAM October 7, PeopleSupport purchased
2008 (PSPT) 30,000
shares
{Title 15, Uni t ed States Code, Sections 78j{b) & 78ff;
Title 17, Code of Federal Regulations,
Sections 240.10b-5 and 240.10b5-2,
and Title 18, United States Code, Section 2. )
The basis for my knowledge and the foregoing charges is ,
in part, as follows:
14 . I have been a Special Agent with the Federal Bureau
of Inv estigation for approximately fiv e years . I am currently
assigned to a squad responsible for investigating v iolations of
the federal securities laws and related offenses. I have
participated in numerous investigations of such offenses and I
have made and participated in making arrests of individuals for
participating in such offenses.
15. The information contained in this affidavit is
based upon my personal knowledge, as well as information obtained
during this investigation, directly or indirectly, from other
sources , including, but not limited to: {a) information provided
to me by the United States Securities and Exchange Commission (the
"SEC"), which includes information and documents obtained from
other ent ities including Galleon Management , L.P., Intel
Corporation (" Intel"), and Poly com, Inc. ( "Polyc om"), among
others; (b) publicly available documents ; {c ) information
provided to me by the CW; and (d) court-authorized wiretaps on
7
certain telephone lines, as is further described below. Because
this affidavit is prepared for limited purposes, I have not set
forth each and every fact I have learned in connection with this
investigation. Where conversations and events are referred to
herein, they are related in substance and in part unless indicated
otherwise. Where figures and calculations are set forth herein,
they are approximate.
Relevant Entities and Individuals
16. Based on information obtained from the SEC,
documents publicly filed with the SEC, public announcements made
by certain of the entities ident i f i ed below, court-authorized
interception of certain wire communications, and information
available to the public over the Internet, I am aware of the
following:
a . At all times relevant to this Complaint, the
Galleon Group ("Galleon") operated a family of hedge funds based
in New York, New York, that included, among others, the Galleon
Technology Funds. At all times relevant to this Complaint,
Galleon Management L.P., of which RAJ RAJARATNAM, the defendant,
was a partner, operated as the General Manager of the Galleon
Technology Funds. Based on public reports, I believe that the
Galleon Group has or has had as .much as $7 billion in assets under
management .
b. At all times relevant to this Complaint,
R J R T N M ~ served as the portfolio manager for the Galleon
Technology Funds and was responsible for directing trading in
those funds.
c. At all times relevant to this Complaint, RAJIV
GOEL, the defendant, was employed by Intel Capital, the investment
arm of Intel, as a Director in Strategic Investments.
d. At all times relevant to this Complaint, ANIL
KUMAR, the defendant, was employed as a Director by McKinsey &
Company, Inc. ("McKinsey"), a global management consulting firm.
I n sider Trading Scheme
General Overview
17. Based on all of the sources of information
referenced herein, including all of the facts and circumstances
described in detail below, I have p r obable cause to believe the
following:
8
a. From at least in or about January 2006 through
in or about July 2007, RAJ RAJARATNAM, the defendant, the CW, and
o thers known and tmknown, participated in a scheme to defraud by
disclosing material, nonpublic information (the "Inside
Information") and/or executing securities transactions based on
Inside Information pertaining to at least the following three
publicly traded companies: Polycom, Hilton Hotels Corp. ("Hilton")
and Google Inc. ("Google"). The means by which RAJARATNAM and the
CW effectuated the fraudulent scheme were as follows : The CW
obtained Inside Information regarding Polycom, Hilton and Google
from various sources who disclosed the Inside Information in
violation of duties of trust and confidence. The CW communicated
this Inside Information to RAJARATNAM, who caused the Galleon
Technology Funds to execute securities transactions on the basis
of this Inside Information, earning a total profit of more than
$12.7 million from the scheme. In exchange, RAJARATNAM provided
the CW with Inside Information regarding other technology
companies.
b. From at least in or about March 2008 through in
or about October 2008, RAJ RAJARATNAM and RAJIV GOEL, the
defendants, and others known and unknown, participated in a scheme
to defraud by disclosing Inside Information and/or executing
securities transactions based on Inside Information pertaining to
at least Clearwire, a publicly traded company. The means by which
RAJARATNAM and GOEL effectuated .the fraudulent scheme were as
follows: GOEL obtained Inside Information regarding investments
made by his employer, Intel Capital, including an investment made
by Intel Capital in Clearwire in or about the spring of 2008.
GOEL provided this Inside Information to RAJARATNAM in violation
of duties of trust and confidence owed to Intel Capital.
RAJA.RATNAM then caused the Galleon Technology Funds to execute
securities transactions on the basis of this Inside Information,
earning a total profit of approximately $579,000 from the scheme.
In exchange, RAJARATNAM placed profitable trades for the benefit
of GOEL in a personal brokerage account maintained by GOEL at
Charles Schwab. For example, as discussed further below, in or
about October 2008, RAJARATNAM executed a profitable trade in
PeopleSupport stock in GOEL's personal brokerage account based on
Inside Information that RAJARATNAM learned from his colleague at
Galleon who sat on PeopleSupport's Board of Dire ctors.
c. From at least in or about July 2008 through in
or about October 2008, RAJ RAJARATNAM, the defendant, CC-1 and
others known and unknown, part icipated in a scheme to defraud by
disclosing Inside Information and/or executing securities
transactions based on Inside Information pertaining to at least
9
the following two publicly traded companies: Akamai and AMD. The
means by which RAJARATNA.t1 and CC-1 effectuated the fraudulent
scheme were a.s follows: RAJARATNAM and CC-1 obtained Inside
Information regarding Akamai and AMD from various inside sources
who disclosed the Inside Information in violation of duties of
trust and confidence. CC-1 communicated Inside Information
regarding Akamai to RAJARATNAM. In addition, RAJARATNAM and CC-1
provided one another with Inside Information regarding AND.
RAJARATNAM caused the Galleon Technology Funds to execute
securities transactions on the basis of this Inside Information,
earning a total profit of approximately $3.5 million from the
scheme.
d . From at least in or about August 2008 through
in or about October 2008, RAJ RAJARATNAM and ANIL KUMAR, the
defendants, and others and unknown, participated in a scheme
to defraud by disclosing Inside Information and/or executing
securities transactions based on Inside Information pertaining to
at least AMD. The means by which RAJARATNAM and KUMAR effectuated
the fraudulent scheme were as follows: KUMAR obtained Inside
Information regarding certain of McKinsey's clients, including
communicated the Inside Information regarding AMD to
RAJARATNAM in violation of duties of trust and confidence mved to
McKinsey and its clients. RAJARATNAM then caused the Galleon
Technology Funds to execute securities transactions based on the
Inside Information. KUMAR stood to benefit from RAJARATNAM's
trading because he was a direct or indirect investor in one or
more hedge funds affiliated with Galleon.
The CW's Interactions with RAJARATNAM
18. Beginning in or about November 2007, I and other
FBI agents have had numerous discussions with the CW, an
individual who subsequently began cooperating with law
enforcement.
1
As discussed further below, the CW's cooperation
included making consensual recordings of four telephone
conversations between the CW and RAJ RAJARATNAM, the defendant.
The CW is an individual who executed securities
transactions based on material, nonpublic information . The cw
has agreed to plead guilty to charges of conspiracy and
securities fraud in connection with this conduct and to cooperate
with the Government in the hope 9f receiving a reduced sentence.
The CW has been cooperating with the FBI since in or about
November 2007. The information the cw has provided has been
corroborated by, among other things, trading records, pen
register data, and telephone records.
10
Based on a review of trading records and other documents, the
consensually recorded telephone conversations between the CW and
RAJARATNAM, as well as information provided by the CW, I believe
that since at l east in or about 2006, RAJARATNAM and the CW
participated in an insider trading scheme in which RAJARATNAM and
the cw provided to one another Inside Information that each of
them had received from other sources, to enable one another to
execute trades based on that information. The CW provided
RAJARATNAM with Inside Information regarding various publicly
traded companies, including, among others, Polycom, Hilton and
Google. In exchange, RAJARATNAM provided the CW with nonpublic
earnings information on a number of companies, including, but not
limited to, Intel . After receiving the Inside Information
relating to Polycom, Hilton and Google, RAJARATNAM executed trades
in the respective securities of those companies.
19. Based on my discussions with the CW, I understand
that, beginning in or about mid- 2005, the CW contacted RAJ
RAJARATNAM, the defendant, to inquire a bout potential empl oyment
at Galleon.
2
During one of their conversa tions, RAJARATNAM asked
the CW to identify the companies concerning which the C\v had an
"edge . " Based on the CW's previous relationship with RAJARATNAM,
the CW understood RAJARATNAM to be asking the cw to identify the
companies from which, or about which, the CW was able to r eceive
Inside Information. RAJARATNAM had previously told the cw that he
had inside sources at various companies including Intel.
RAJARATNAM told the CW that he received Inside Information about
these companies. In an effort to secure employment at Galleon,
the CW told RAJARATNN4 that s/he had an edge on Polycom. At that
time the CW was associated with a Polycom executive (the "Polycom
Executive") who had previously provided the CW with Inside
Information about Polycom's quarterly earnings resul ts.
20 . Based on my discussions with the cw, I understand
that in a series of subsequent conversations with RAJ RAJARATNAM,
the defendant, in or about 2006 and 2007, the cw provided
RAJARATNAM with Inside Information, including information on
Polycom, Hilton and Google. In exchange, RAJARATNAM provided the
CW with Inside Information on a number of companies.
Interception of Wire Communications
21. In connection with the invest igation, on or about
March 7, 2008, and on certain dates thereafter, the FBI obtained
2
The CW has known RAJARATNAM since in or about the rnid-
1990s in connection with the CW s prior employment.
11
court orders authorizing interception of communications over a
cell phone used by RAJ RAJARATNAM, the defendant (the "Rajaratnam
Cell Phone''). As discussed further below, a number of the
intercepted calls consist of RAJARATNAM either providing,
receiving, or seeking Inside Information about various publicly
traded companies.
3
22. Also in connection with the investigation, on or
about August 13, 2008, and then again on September 12, 2008, the
FBI obtained court orders authorizing interception of
communications over (i) a landline used by CC-1 ( "CC-1 Landline
A"); (ii) a second landline used by CC-1 ("CC-1 Landline B"); and
(iii) a cell phone us.ed by cc-1 (the "CC-1 Cell Phone;" cc-1
Landline A, CC-1 Landline B and the CC-1 cell Phone are referred
to, collectively, as the "CC-1 Phones"). As discussed further
below, a number of the intercepted calls consist of CC-1 either
providing, receiving, or seeking Inside Information about various
publicly traded companies.
Insider Trading in the Securities of Polycom
23. Based on my review of documents provided by
Polycom, I have learned that, at all times relevant to this
Complaint, the Polycom Executive was employed by Polycom.
Polycom's "Insider Trading Policy," which applies to all
employees, officers and directors of Polycom, among others,
provides that "the disclosure of material nonpublic information to
others who then trade in [Polycom] 's securities, is prohibited by
the federal and state securities laws.
11
The policy further
provides: "No Insider shall disclose (' t i p') Material Nonpublic
Information to any other person (including family members) where
such information may be used by such person to his or her profit
by trading in the securities of companies to which such
information relates . . . . " The policy provides that information may
be "Material Nonpubl ic Information" if "there is a reasonable
likelihood that it would be considered important to an investor in
making an investment decision regarding the purchase or sale of
the company's Securities." The policy further provides examples
of such information, including: "(f]inancial results" and
"[p]rojections of future revenues, earnings or losses, or other
earnings guidance . "
The summaries of the intercepted calls that are set
forth in this affidavit are based on prelimina.ry draft
transcripts prepared from the recordings, which I have reviewed
and which are subject to revision.
12
.
24. Based on my review of documents obtained from
Polycom, I have learned that in late December 2005 and early
January 2006, the Polycom Executive obtained Inside Information
relating to Polycom's revenue for the quarter ending on December
31, 2005, and the company's sales forecasts of anticipated
bookings (the "Polycom Inside Information").
25. Based on conversations with the CW, I have learned
that in or about January 2006, the Polycom Executive related
Polycom Inside Information to the CW. Specifically, the Polycom
Executive informed the CW that Polycom's revenue for the quarter
ending December 31, 2005 was strong. When told what analysts'
expectations were for Polycom's revenue for the quarter ending in
December 2005, the Polycom Executive told the CW that Polycom
would beat analysts' expectations.
26. The CW informed me that the Polycom Executive
provided the Polycom Inside Information to the CW because the two
were friends, and because the Polycom Executive anticipated that
the CW would repay the CW for money that the CW had lost executing
securities transactions in the Polycom Executive's personal
brokerage account.
27. Based on conversations with the CW, I have learned
that in or about January 2006, the CW provided the Polycom Inside
Information that s/he had obtained from the Polycom Executive to
RAJ RAJARATNAM, the defendant. Specifically, the CW informed
RAJARATNAM that Polycom's revenue for the quarter ending December
2005 was going to be good and that guidance regarding its
performance in the quarter ending in March 2006 would be good.
The CW also indicated to RAJARATNAM that s/he had a source at
Polycom.
28. Based on my review of documents provided by
Galleon, Instinet (an electronic securities market for
institutional investors), Galleon's prime broker, and certain
telephone records, I have learned the following:
a. On or about January 9, 2006, at approximately
2:47 p.m.,
4
the cw sent the following instant message to RAJ
RAJARATNAM, the defendant: "donot (sic] buy plcm till i het [sic]
guidance; want to make sure guidance OK." Based on conversations
with the CW, I learned that the CW meant that RAJARATNAM should
not buy Polycom stock until the CW obtained material, nonpublic
4
Unless otherwise noted, all times that appear
throughout this Complaint are reflected in Eastern Standard Time.
13
information regarding the guidance that Polycom planned to
announce regarding its anticipated performance for the quarter
ending in March 2006.
b. On or about January 10, 2006, at approximately
10:59 a.m., a telephone call was made from a cell phone subscribed
to the CW to the Rajaratnam Cell Phone, which lasted one minute.
c. On or about January 10, 2006, at approximately
11:43 a.m., RAJ RAJARATNAM, the defendant
1
caused the Galleon
Technology Funds to purchase 7
1
500 shares of Polycom stock at an
average price of $16.70 per share .
d. On or about January 11, 2006, at approximately
6:01p.m. Pacific Time r a telephone call was made from a cell
phone used by the Polycom Executive (and subscribed to Po lycom) to
the CW' s home phone/ approximately six minutes.
e. On or about January 12, 2006, at approximately
10 : 30 a.m., the CW sent the following instant message to RAJ
RAJARATNAM, the defendant: "hi; u there?"
.
f . On or about January 12, 2006, at approximately
10:33 a.m.
1
RAJARATNAM sent the following instant message to a
trader for the Galleon Technology Funds: "buy 60 PLCM." Based on
my rev iew of account records pertaining to the Galleon Technology
Funds, and my understanding that "PLCM" is the trading symbol for
Polycom
1
I believe that RAJARATNAM was instructing his trader to
purchase 60,000 shares of Polycom for the Galleon Technology
Funds.
g. Between on or about January 11, 2006 and on or
about January 25, 2006
1
RAJARATNAM caused the Galleon Technology
Funds to purchase approximately 237,500 shares of Polycom stock at
prices ranging from $l6.50 to $16.86 per share, as well as 500
February $17. 50 call options
5
in Polycom for a total price of
approximately $38,000 .
5
A "call option" gives the purchaser the right to buy a
certain number of shares (typically 100 shares) of an underlying
security at a specified price, until the specified expiration
date of the call option (typically the third Friday of a
specified month). Thus, a "February $17.50 call option// in
Polycom gives the purchaser of the option the right to buy 100
shares of Polycom stock from the seller of the option at a price
of $17 . 50 per share, until the third Friday of
14
29. Based on my review of public records and news
reports, I have learned .that Polycom announced its quarterly
earnings after the market closed on January 25, 2006 . Revenue for
the quarter was $156.1 million, which beat analysts' expectations
of $150.9 million. On the following day, Polycom's stock price
opened at $18.30 per share, up approximately 8 percent ($1.32}
over the previous day's close.
30. Based on my review of account records for the
Galleon Technology Funds, I have learned that during the period
from on or about January 26, 2006 to on or about February 15,
2006, RAJ RAJARATNAM, the defendant, caused the Galleon Technology
Funds to sell all of the Polycom shares and call options purchased
by RAJARATNAM beginning on or about January 10, 2006, for a total
profit of approximately $700,000.
Insider Trading in the Securities of Hilton
31. Based on my training, experience, and review of
public articles, I have learned that public companies retain
credit ratings agencies ( "CRAs") such as Moody's Investors
service, Inc. ("Moody's") to provide credit ratings. I have
learned that public companies that retain CRAs entrust the CRAs
and their employees with material, nonpublic information.
32. Based on documents provided by Moody's, I have
learned that in 2007, an Associate Analyst employed at Moody's
(the "Moody's Analyst") was involved in Moody's rating of Hilton.
Based on my training, experience, and review of public articles, I
believe that as an employee of Moody's, the Moody's Analyst owed
duties of trust and confidence not to disclose for personal gain
material, nonpublic information regarding Moody's and its clients.
33. Based on document s provided by Hilton and Moody's,
I have learned that on or about July 2, 2007, at approximately
2:20p.m., certain executives of Hilton placed a phone call to a
Vice President and Senior Analyst at Moody's who served as Moody' s
Lead Analyst for its rating of Hilton. During the call, which
l asted approximately seven minutes , the Hilton executives informed
Moody's that Hilton would be acquired by the Blackstone Group LP
("Blackstone"), and that Hilton would likely announce the
acquisition sometime before July 4, 2007 (the "Hilton Inside
Information") .
34. Based on my conversations with the CW, I have
learned that on or about July 2, 2007, the Moody's Analyst told
the cw that Hilton was going to be taken private (meaning it would
be acquired and thereby become a private company) the following
15
day at a price substantially above its publicly traded stock
price.
35 . I have reviewed phone records from a
telecommunications company for a cell phone used by the Moody's
Analyst at all times relevant to this Complaint (the "Moody's Cell
Phone"}. Consistent with what the CW told me, t hese phone records
show that on or about July 2, 2007, at approximately 3:06p.m. , a
telephone call was made from the Moody's Cell Phone to the CW's
home phone, lasting approximately one minute. A second such call
was made at approximately 3:10p.m. , lasting approximately two
minutes. A third such call was made at approximately 3:14p.m.,
lasting approximately one minute.
36. Based on conversations with the CW, I learned that
on or about July 2, 2007, the CW provided Hilton Inside
Information to RAJ RAJARATNAM, the defendant. Specifically, the
CW informed R J R T N ~ ~ that Hilton was going to be taken private
and that it was a "sure thing." The CW informed RAJARATNAM that
the source of the Hilton Inside Information was very good. The CW
further informed me that RAJARATNAM understood that the CW was
providing him with Inside Information.
37 . Based on my review of account records for the
Galleon Technology Funds, I have learned that on July 3, 2007, RAJ
RAJARATNAM, the defendant, caused the Galleon Technology Funds to
purchase 400 , 000 shares of Hilton stock at an average price of
approximately $35.13 per share.
38. Based on my review of public records and news
reports, I have learned that on July 3, 2007, fol lowing the close
of the market, Hilton announced that it had agreed to be acquired
by Blackstone for $20 .1 billion in cash, and that Blackstone had
agreed to buy all outstanding shares of Hilton for $47.50 per
share, representing a premium of approximately $10 per share.
39. Based on my review of account records for the
Galleon Technology Funds, I learned that on July 5, 2007 and July
16, 2007, RAJ RAJARATNAM, the defendant, caused the Galleon
Technology Funds to sell all 400,000 shares of Hilton stock,
collectively, at prices ranging from $45 . 25 to $45 . 63 per share,
for a profit of approximately $4 million.
40. Based on conversations with the CW, I learned that
following the announcement that Blackstone would acquire Hilton,
the CW arranged to pay the Moody's Analyst $10,000 in exchange for
the Hilton Inside Information.
16
Insider Tradi ng in the Securities of Google
41. Based on my training, experience, and review of
public news articles, I have learned that public companies retain
third party investor relations firms such as Market Street
Partners ("Market Street") to assist in preparing and distributing
quarterly earnings announcement s and other press releases. I have
learned that public companies that retain outside investor
relations firms entrust the firms and their employees with
material, nonpublic information.
42. Based on conversations with the CW and my review of
public information available over the Internet, I have learned
that during certain times relevant to this Complaint, the CW was
in contact with an employee of Market Street (the "Market Street
Employee"). Based on my training and experience, I believe that
as an employee of Market Street, the Market Street Employee owed
duties of trust and confidence not to disclose for personal gain
material, nonpublic information regarding Market Street and its
clients.
43. Based on documents provided by Google that I have
reviewed, I learned that Google retained Market Street to provide
investor relations services with respect to Google's earnings
release for the quarter ending June 30, 2007. On or before July
2, 2007, Google communicated to Market Street certain material,
nonpublic information regarding its performance for the quarter
ending in June 2007 (the "Google Inside Information").
44. Based on my conversations with the CW, I learned
that on or before July 12, 2007, the Market Street Employee
communi cated the Google Inside Information to the CW by tel l ing
the CW that Google's earnings per share for the quarter ending in
June 2007 would fall below analysts' expectations. The Market
Street Employee informed the CW that s/he was able to obtain this
material, nonpublic information because Google was one of his/ her
accounts at Market Street. The Market Street Employee provided
the material, nonpublic information to the CW as part of his/ her
efforts to find hedge funds or other persons or entities willing
to pay him/ her for Inside Information in the future.
45 . Based on conversations wi t h the CW, I have learned
that in or about July 2007, the CW provided Google Inside
Information to RAJ RAJARATNAM, the defendant, prior to Google's
earnings announcement. The cw told RAJARATNAM that Google's
earnings per share for the quar ter ending June 30, 2007 would be
below analysts' expectations. The CW informed RAJARATNAM that the
17
source of the Googl e Inside Information was an individual who
I
worked at an investor relations firm.
46. My review of phone records associated with the CW
show that on or about July 10, 2007, at approximately 11:44 p.m.
Pacific Time, a telephone call was made from CW's home phone to a
phone number used by the rvrarket Street Employee, lasting
approximately 16 minutes. Other phone records I have reviewed
show that or about July 17 , 2007, at approximately 7:17a.m., a
telephone call was made from the Rajaratnam Cell Phone to CW's
home phone, lasting approximately five minutes.
47. Based on my review of account records for the
Galleon Technology Funds, I learned the following:
a. On or about July 17 , 2007, RAJ RAJARATNJl..M, the
defendant, caused the Galleon Technology Funds to purchase 1,000
July $550 put options
6
in Google for a total price o f
approximately $984,430, and to sell short 25,000 shares of Google
stock at an average price of $555.84 per share.
7
b. on or about July 18, 2007, RAJARATNAM caused
the Galleon Technology Funds to purchase 1,600 July $550 Google
put options for a total price of approximately $1,958,045.
8
c. On or about July 19, 2007, RAJARATNAM caused
the Galleon Technology Funds to sell short 100,000 shares of
Google at an average price of $549.44 per share.
6
A "put option" typically gives the purchaser the right to
sell a certain number of shares ( typically 100 shares) of an
underlying security at a specified price, until the specified
expiration date of the put option (typically the third Friday of
a specified month). Thus, a "July $550 put option" in Google
gives the purchaser of the option the right to sell 100 shares of
Google stock to the seller of the option at a price of $550 per
share, until the third Friday of July. The put options in Google
purchased by RAJARATNAM that are described above expired on
Friday, July 20, 2007.
7
RAJARATNAM also caused the Galleon Technology Funds to
purchase Google put options a few days prior to July 17.
8
for the
profit
RAJJlJRATNAM also sold 500 July $550
Galleon Technology Funds on July 18,
~ approximately $216 ,274.
18
Google put options
2007, realizing a
48 . Based on my review of public records and news
reports, I have learned that on July 19, 2007, fol lowing the close
of the market, Google announced its earnings for the quarter
ending June 30, 2007. Whereas analysts expected Google t o earn
$3.59 per s hare, Google announced earnings of onl y $2.93 per
share , or $3.56 per share if not for costs associated wi th
employee stock compensation. On July 20, 2007, Google stock
opened at $511.90 per share, down approximately 7 percent ($36.69)
from the previous day's close.
49 . Based on my review of account records for the
Galleon Technology Funds, I have learned that following the
earnings announcement by Google, RAJ RAJARATNAM, the defendant,
caused the Galleon Technology Funds to cover the short positions
in Google described above, and to either exercise or sell the put
options in Google described above, for a profit o f approximately
$8 million.
50. Based on convers a tions with the CW, I learned that
the CW informed RAJ RAJARATNAM, the defendant, that his/he r source
of the Googl e Inside Information wanted to be paid for material,
nonpublic information going forward . The cw subsequently told
RAJARATNAM that his/ her source of the Google Inside Information
had stopped talking to him/ her. On or about January 14 , 2008,
during a phone call between RAJARATNAM and the CW that was
consensually recorded by the cw, RAJARATNAM asked the CW whether
s / he had heard anything about Google . The cw replied, "I told you
that lady won't speak to me . " RAJARATNAM replied, "Idiot . "
Insider Trading in the Securit ies of Clearwire
51. As is further described below, I believe that RAJIV
GOEL, the defendant, obtained Inside Information in the course of
his employment with Intel regarding an investment made by Intel
into Clearwire, and that GOEL provided this Inside Information to
RAJARATNAM for purposes of executing securities transactions .
52. Based on documents provided by Intel, I have
learned that the Intel Code of Conduct provides: "Any Intel
employee who possesses material, non-public information regarding
Intel or any other company must not ... 'tip' others who may buy or
sell securities because of the inside information. " Intel advises
its employees that "material" information may include "financial
results" and "news of the disposition or acquisition of
significant assets."
53. Based on my review of public records, news reports,
telephone records, account records for the Galleon Technology
19
Funds, and intercepted wire communications occur ring over the
Rajaratnam Cell Phone, I have learned the following:
a. On or about March 19, _ 2008, at approximately
7:54p.m., RAJIV GOEL, the defendant, called the Rajaratnam Cell
Phone and left a voicemail for RAJ RAJARATNAM, the defendant,
saying: ~ e y RAJ. This is RAJIV. Uh, hey, just called to say
you're a good man, ok . Give me a call whenever you get a chance . "
Five minutes later, on or about March 19, 2008, at approximately
8:00p. m., RAJARATNAM used the Rajaratnam Cell Phone to call GOEL.
During the call, GOEL told RAJARATNAM: "I tell you the Sprint
thing is not happening in the short term, ok . There is a board
meeting. . . in fact today. . . it's not happening today at the board
meeting.u RAJARATNAM replied "Ok
11
and thanked GOEL. Based on my
review of information that became public subsequent to this call,
and as discussed further below, I believe GOEL's reference to "the
Sprint thingu to be a reference to a transaction involving Intel,
Sprint, and other companies in which a large investment would be
made in Clearwire.
b. On or about March 20, 2008, at approximately
9:05p.m. , RAJARATNAM made an outgoing call over the Rajaratnam
Cell Phone to GOEL. During the call, RAJARATNAM and GOEL spoke
about various ways to calculate the value for the "new entity
11
(referring to the new Clearwire Corp. that would emerge from a
possible business transaction involving Intel, Sprint, Clearwire,
and other companies) based on material, nonpublic information
discussed during the call concerning the size of the investment
that would be made in Clearwire. Specifically, GOEL asked
RAJARATNAM if he had digested the information GOEL had given him.
RAJARATNAM responded that he had, and then proceeded to articulate
how he "would analyze it." RAJARATNAM concluded that Clearwire's
"stock is going to trade somewhere between 16 and 20 [dollars per
share]." RAJARATNAM and GOEL reached this conclusion by
extrapolating the value of Clearwire from the equity stake Intel
would be receiving in exchange for its investment in Clearwire.
For example, in reaching this conclusion, RAJARATNAM and GOEL
discussed, among other things, that Clearwire would receive an
infusion of approximately $1 billion from Intel, that Intel would
receive a ten percent stake in the new entity, and that the new
entity "will have $3.5 billion in cash" in addition to the "$1.2
billion in cash" the entity already had, for a total of "$4.7
[billion] in cash. " GOEL then told RAJARATNAM that there are
"gonna be such heavyweights on the Board [of the new entity] , it's
not even funny." GOEL listed the names of a number of executives
at major corporations whom he said would be on the board of the
new entity. GOEL then told RAJARATNAM he would call him from a
different phone because they had a bad connection. Based on my
20
review of public information pertaining to a transa.ction involving
Clearwire, Intel , and other companies, the information discussed
by RAJARATNAM and GOEL rel ating to Clear wire's cash position and
its dealings with Intel and other entities constituted material,
nonpublic information.
c. On or about Thursday, March 20, 2008, at
appr oximately 9:11p.m. , RAJARATNAM received an incoming call on
the Rajaratnam Cell Phone from GOEL. GOEL asked RAJARATNAM to get
him a job with "one of your powerful friends," adding that he was
"tired" of working at Intel. Later, GOEL and RAJARATNAM continued
their conversation about the possible business deal involving
Intel, .spr int, Cl earwire, and other companies. GOEL t old
that if GOEL heard "anything about Intel or , or even
about that, you know, the, the deal, I'll give you." RAJARATNAM
responded: "April 1st, right?" GOEL said, '' yeah but you know these
deals. Don't hold me to that date because these deals they're so
complex and so many part ies involved they will all have their say
right now. But yesterday our Board approved this deal."
d. On Friday, March 21, 2008, the NASDAQ stock
market , on which Clearwire trades, was closed. On or about
Monday, March 24, 2008, RAJARATNA!-1 caused the Galleon Technol ogy
Funds to purchase approximately 125,800 shares of Clearwire stock
at prices ranging from $10.95 to $11.74 share.
e. On or about March 24, 2008, a t approximately
7 :59p. m., RAJARATNAM received a call over the Rajaratnam Cell
Phone from GOEL. During the call they discussed the transaction
involving Intel, Sprint, Clearwire, and other companies, and GOEL
told RAJARATNAM he wanted to explain why he thought RAJARATNAM' s
valuation was incorrect. GOEL told RAJARATNAM to call him i n an
hour at home because, ''I don't like talking over cell phone on
this . " I believe that GOEL was continuing to discuss with
RAJARATNAM Inside Information about the proposed deal involving
Intel, Sprint, Clearwire and other companies, but that he did not
want to talk to RAJARATNAM on his cell phone because he was
nervous about doing so.
f. On or about March 25, 2008 , RAJARATNAM caused
the Galleon Technology Funds to purchase approximately 136,000
shares of Clearwire stock at $12.04 per share.
g. On or about March 25 , 2008 , aft er the close of
the market, news reports indicated that Comcast and Time Warner
were in discussions with Clearwire and Sprint regarding the
creation of a joint venture to operate a high- speed nationwide
wireless network . The news articles indicated that Sprint and
21
Cleanvire "are now trying to raise at least $3 billion" for the
joint venture. The news reports further indicated that "Intel has
signaled willingness to put in about $1 billion or more.
119
h. On or about March 25, 2008, at approximately
8:22p.m., RAJARATNAM made an outgoing call over the Rajaratnam
Cell Phone to an individual that I believe is employed by or
affiliated with Galleon (the "Galleon Employee"). During the
call, the Galleon Employee said to RAJARATNAM: "We're fucked
man .... It just hit the Wall Street Journal." RAJARATNAM asked
the Galleon Employee what s/he was referring to and the Galleon
Employee replied: "the Clearwi re stuff. It 's all over the \.ilall
Street Journal.
11
RAJARATNAM asked, "What price did they say?"
The Galleon Employee answered: "They're short on details but they
kinda say, you know, they're looking to raise as much as $3
billion but they don't have any of the equity splits. But they
named Comcast, they named Time Warner, Clearwire and Sprint."
RAJARATN.A..M replied, "Okay, shit." The Galleon Employee then said
"I don' t know how much we got in today . .. .
11
Based on the
statements made during this call by the participants, as well as
my training, experience and other intercepted calls I have
reviewed during the investigation, I believe that the Galleon
Employee and RAJARATNAM were discussing the proposed transaction
involving Intel, Sprint, Clearwire and other companies, about
which RAJARATNAM had received inside information from GOEL. I
also believe that when the Galleon Employee said s/he did not know
"how much we got in today," s/he meant that s/he did not know how
much stock RAJARATNAM and the Galleon Employee were able to
purchase that day in advance of the news of the possible
transaction hitting the newspaper.
i. The market for the securities of Clearwire
responded positively to the news articles published on the evening
of March 25, 2008. on March 26, 2008, Clearwire stock opened at a
price of $15.85 per share, up approximately 18 percent ($2 .46)
over the previous day's close.
j. On or about March 26, 2008, RAJARATNAM caused
the Galleon Technology Funds to sell 68, 000 shares of Clean-1ire
stock at a price of $15.55 per share. The Galleon Technology
9
The transaction would not be announced by the parties
involved until several weeks later. Specifically, on or about
May 7, 2008, Clearwire announced that it would combine its
wireless broadband unit with that of Sprint Nextel. A group of
outside investors would infuse $3 . 2 billion in the company, which
infusion included a $1 billion investment by Intel .
22
Funds also purchased additional shares of Clearwire stock on March
26, 2008.
k. On or about April 2, 2008, RAJARATNAM caused
the Galleon Technology Funds to sell 44,200 shares of Clearwire
stock at a price of $14.26 per share.
1. On or about April 15, 2008, at approximately
6:40p.m., RAJARATNAM received an incoming call over the
Rajaratnam Cell Phone from GOEL. Referring to the transaction
involving Clearwire, GOEL told RAJARATNAM: "Listen ... I'm still in
the middle of that conversation, we had a break. But, that stuff
is not, uhh, happening as planned. [There are) some major bumps
on the way. Ok?" RAJARATNAM replied, "Ok." GOEL said he would
call RAJARATNAM from home that evening.
m. On or about April 18, 2008, RAJARATNAM caused
the Galleon Technology Funds to sell 149,600 shares of Clearwire
stock at a price of $13.25 per share. Profit in the Galleon
Technology Funds based on the sales of March 26, 2008, April 2,
2008, and April 18 , 2008, as described above, totaled
approximately $579,000 .
Insider Trading in the Securities of Akamai
54. Based on my review of phone records, public records
available over the Internet, and intercepted calls, I believe that
during certain times relevant to this Complaint, CC-1 was in
contact with an individual who was employed by Akamai (the "Akamai
Executive").
55 . Based on my review of public records available over
the Internet, I have learned that Akamai's Code of Business
Conduct and Ethics, which applies to all Akamai employees,
provides: "It is a conflict of interest, and illegal, if
investment activity that benefits you (or a relative or other
person with whom you have a personal relationship), actually is,
or appears to be, influenced by material, non-public information
that you possess by virtue of your position with Akamai." The
code defines ''material non-public information" as information
''that is not publicly available that could affect the price of our
securities." It notes that such information includes, but is not
limited to, "financial results , earnings, estimates ... or other
significant business developments at Akamai." The code further
provides: "[Y]ou may not give material, non-public information, or
tips based on such information, to family members, friends, or
. anyone outside the Company ."
23
56. Based on my review of public records, news reports,
phone records , account records for the Galleon Technology Funds,
and intercepted wire communications occurring over the Rajaratnam
Cell Phone, I have l earned the foll owing:
a. On or about July 24, 2008, at approximately
4 :00p. m., shares of Akamai closed at a price of $32.18 per share .
b. On or about July 24 , 2008 , at approxi mately
8:52p.m., CC-1 received a call on the CC-1 Cell Phone from a
telephone number subscribed to the Akamai Executive. The cal l
lasted approximately 15 minutes.
c. On or about July 24, 2008, at approximatel y
9:18 p . m., CC-1 use d CC-1 Landline B to call RAJ RAJARATNAM, the
defendant, on the Rajaratnam Cell Phone. CC- 1 said, ''Akamai ....
I'm trading it tomorrow ... . They're gonna guide down. I just got
a call from my guy.. . . I was talking about t he family and
everything, and then he said people think it's gonna go to 25
[dollars per share]. They print on Wednesday. n CC-1 told
RAJARATNAM that s / he would explain later how s/he "got this guy to
trust me again." CC-1 said that s/he was talking to him "about
the f ~ m i l y and how "you.' re the only person in the family that
helps me." CC-1 further explained that the individual then said,
"by the way, we ' re gonna guide down on Wednesday .... we're gonna
guide down a lot. People internally are saying it's gonna go to
25 [dollars per share) , our stock .... " RAJARATNAM said that h e
would be "radio silent . " RAJARATNAM asked when Akamai would
report, and CC-1 replied, "Wednesday." RAJARATNAl-1 said that "you
got a f ew more days . Friday, Monday ... . " CC-1 said, "Just keep
shorting every day. We got a lot of days . . .. "
d. On or about Friday, July 25, 2008, RAJARATNM1
caused the Galleon Technology Funds co short approximately 138,550
shares of Akamai stock at a price of $31.69 per share.
e. On or about Tuesday, July 29, 2008, RAJARATNAM
caused the Galleon Technology Funds to short approximately 173,300
shares of Akama i stock at a price of $31.67 per share.
f. On or about Wednesday, July 30, 2008, at
approximately 9:28a.m. , RAJARATNAM used the Rajaratnam Cell Phone
to call CC-1 on the CC-1 Cell Phone. CC-1 said that they had done
a great job maintaining the confidentiality o f the information
regarding Akamai. Referring to his /her source at Akamai, CC-1
told RAJARATNAM that s / he was going to call his/ her source agai n
to "see how much clarity I can get."
24
g. On or about Wednesday, July 30, 2008, at
approximately 12:58 p.m., RAJARATNAM used the Rajaratnam Cell
Phone to call CC-1 on the CC-1 Cell Phone. CC-1 said that s / he
had made a "calculated decision" to not call his/ her source agai n.
S/he told RAJARATNAM that s/he was "afraid" that if the stock
price were to fall after the upcoming earnings announcement, he
'llOUld be "afraid, " and "if he loses his job, I' 11 get blamed for
it If
h. On or about Wednesday, July 30, 2008,
RAJARATNAM caused the Galleon Technology Funds to short
approximately 86,650 shares of Akamai stock at prices ranging from
$31.08 to $31.12 per share. RAJARATNAM also caused the Galleon
Technology Funds to purchase 1,400 put options in Akamai.
i. On or about Wednesday, July 30, 2008, at
approximately 4:01 p.m., Akamai announced its quarterly earnings
for the quarter ending on June 30, 2008. During an earnings call
shortly thereafter, Akamai provided its guidance for the following
quarter. Specifically, Akamai announced that it expected earnings
per share for the following quarter to be 39 to 40 cents, below
analysts' expectations of 42 cents. on the following day, shares
of Akamai opened at $25.06 per share, down approximately 20
percent ($6.19) from the previous day's close.
j. On or about Wednesday, July 30, 2008, at
approximately 5:30p.m., RAJARATNAM used the Rajaratnam Cell Phone
to call CC-1 on CC-1 Landline A. RAJARATNAM thanked CC-1 for the
information that CC-1 had provided.
k. Between on or about July 31, 2008 and ~ g u s t 6,
2008, RAJARATNAM caused the Galleon Technology Funds to cover the
short positions in Akamai stock described above, and to sel l the
put options in Akamai described above, for a profit of
approximately $3.5 million.
Insider Trading in the Securities of AMD
57. Based on my review of documents provided by the SEC
and Galleon, I learned that during all times relevant to this
Complaint, ANIL KUMAR, the defendant, was employed by McKinsey as
a Director. Based on my training, experience, and review of
public records available over the Internet, I believe that as an
employee of McKinsey, KUMAR owed duties of trust and confidence
not to disclose for personal gain material, nonpublic information
regarding McKinsey and its clients.
58 . Based on my review of documents provided by
25
Galleon, I learned that KUMAR, the defendant, was a direct or
indirect investor in certain hedge funds managed by Galleon.
59. Based on my review of public records, news reports,
telephone records, documents provided by AMD and the SEC, account
records for the Galleon Technology Funds and other accounts
managed by Galleon, and intercepted communications occurring over
the Rajaratnam Cell Phone and the CC-1 Phones, I have learned the
following:
a. In or about June 2008, AMD entered into
exclusive negotiations with investors based in Abu Dhabi over a
deal pursuant to which AMD would keep its design business but spin
off its manufacturing bus.Lness, referred to as the "fab" business,
into a separate entity (the "AMD Reorganization"). Also in or
about June 2008, AMD retained McKinsey to provide consulting
services in connection with the AMD Reorganization. ANIL KUMAR,
the defendant, worked on the AMD Reorganization on behalf of
McKinsey.
b. On or about June 6, 2008, at approximately 7:21
p.m., CC-1 called RAJ RAJARATNAM, the defendant, on the Rajaratnam
Cell Phone. CC-1 told RAJARATNAM that CC-1 had spoken with an
executive at AMD (the ".MID Executive") . Referring to the AMD
Reorganization, CC-1 said that the was "not close ."
c. On or about June 6, 2008, at approximately 7:26
p.m., RAJARATNAM used the Rajaratnam Cell Phone to call CC-1.
RAJARATNAM advised CC-1 to sell short AMD stock, and then to "go
long it before the deal. "
d. On or about Friday, August 15, 2008, at
approximately 11:04 a.m., KUMAR called RAJARATNAM on the
Rajaratnam Cell Phone. Referring to AMD, KUMAR told RAJARATNM1
that "yesterday" the relevant parties had "shaken hands and said
that they're going ahead with the deal." KUMAR said, "I think you
can now just buy [AMD stock] ." RAJARATNAM asked how AMD' s current
quarter was "tracking," and KUMAR replied, "I'm pretty sure I can
also check that, but it ... will be such a boost from this
announcement it'll be fine." RAJARATNAM asked how much "they"
were investing . KUMAR replied that they would invest "up to six
to eight billion" dollars. KUMAR also told RAJARATNAM that the
announcement would not take place "until the week after Labor
Day." RAJARATNAM and KUMAR then agreed that RAJARATNAM would buy
one mi l lion shares of AMD stock "in the India book." RAJARATNAM
then asked KUMAR about Spansion. KUMAR replied that he would be
meeting the "COO'' for lunch next Friday, and that, "I'l l know much
more after I meet him.u
26
-
e. On or about Friday, August 15, 2008, . at
approximately 11:20 a.m., RAJARATNAM called c c ~ on CC-1 Landline
A. RAJARATNAM aske d CC-1 whether s/he had spoken with the AMD
Executive. CC-1 indicated that the AMD Executive was "gonna be
here on Monday" to meet \'lith IBM. Based on intercepted wire
communications, I learned that IBM was involved in the A}ID
Reorganization because the new, separate entity containing AMD's
fab needed to obtain a license from IBM to use cer tain IBM
technology. CC- 1 said that s/he had heard from IBM t hat t he
transaction involving AMD "will get done on [September) 9th," but
that the AMD Executive had told him/her "mid-September or
something like that." RAJARATNAM informed CC-1 that "yesterday
they had a shake hands." CC-1 and RAJARATNAM t hen they discussed
buying shares of AMD. RAJARATNAM asked whether the AMD Executive
would give CC-1 " the full low down," and CC-1 replied, "Oh yeah .
Plus IBM will, too." RAJARATNAM and CC-1 then discussed an IBM
executive whom CC-1 knew (the "IBM Executive"). RAJARATNAM
i ndicated to CC-1 that the "Arabs" would invest "six to eight
billion" dollars in the fab. CC-1 said t hat I BM would pr0Vide AMD
with its technology. At the end of the call, CC-1 said that s/he
would cal l the IBM Executive to "see what he knows."
f. On or about Friday, August 15, 2008, at
approximately 12:38 p.m., RAJARATNAM called CC-1 on CC- 1 Landline
A. RAJARATNAM asked whether it was CC-1 who was buying AMD stock.
CC-1 said that s / he was not and that s / he "didn't tell shit to
anybody." CC-1 said that s/he left a message for the IBM
Executive. RAJARATNAM said that he wanted to buy 10 million
shares, and CC-1 said that s/he wanted to buy "a lot ," too. CC-1
said, "I don't want anybody else to make money on this but us,
'cuz I don't want to get in trouble for a lot of reasons."
g. On or about Friday, August 15, 2008, at
approximately 2:04p.m., RAJARATNAM received a call on the
Rajaratnam Cell Phone from the Galleon Employee. RAJARATNAM told
the Galleon Employee that ''AMD had a handshake with the, the
Arabs," and that the "Arabs" were going to invest "six billion
dollars." RAJARATNAM told the Galleon Employee, "I'm buying
some ... I'm buying 250 [thousand shares) for you."
h. On Friday, August 15,
the Galleon Technology Funds to purchase
shares of AMD stock for $5.55 per share.
the Galleon Technology Funds to purchase
2008, RAJARATNAM caused
approximately 2,100 ,100
RAJARATNAM also caused
call options in AMD.
i . On Monday, August 18, 2008, RAJARATNAM caused
the Galleon Technology Funds to purchase more than 2.8 million
additional shares of AMD stock for $5.75 per share. On or about
27
the same day, an additional one million shares of AMD stock were
purchased in an account held in the name of "Galleon International
Master Fund, SPC Ltd., Asia Spec. Ops. ," for $5.81 per share.
j . On or about August 19, 2008, at approximately
2:52p.m., RAJARATNAM received a call on the Rajaratnam Cell Phone
from CC-1. CC-1 indi cated that s/he had spoken 11rith the AMD
Executive, who told him/her that "vlall Street will be shocked,"
and that AMD will "definitely make the announcement ... before they
print [quarterl y earnings], but it'll be end of September,
probably." Later RAJARATNAM said, "Betv1een my guy and your guy we
can nail this . " CC-1 and RAJARATNAM discussed the importance of
keeping the information confidential. CC-1 said that "if it
leaks, I think I'm out of business .. . because ... who knows
IBM? And who, who's in bed with AMD? Put [CC-1)'s name on the
fuckin' ticket."
k. On or about August 26, 2008, at approximately
10:47 a.m. , RAJARATNAM called CC-1 on CC-1 Landline B. CC-1 and
RAJARATNAM discussed certain details regarding the transaction
involving AMD. RAJARATNAM said that he had heard that the
investors would pay $1.2 billion to increase their ownership in
AMD to 20 percent, and then would invest six to eight billion
dollars in the "fab," which will be owned "SO/SO" by AMD and the
investors . RAJARATNAM also told CC-1 that AMD is anticipating
quarterly revenue for the current quarter to be "1560" {which I
believe refers to $1.56 billion), whereas analysts were expecting
revenue of only "1480" (which I believe refers to $1.48 billion).
CC-1 later asked, "If the two of us weren't close to the company
as we are, would you be long the stock?" RAJARATNAM replied,
"Yeah, no. I wouldn't." CC-l said that s / he "wouldn't of
touch[ed) it with a fucking 10-foot pole."
l. On or about August 27, 2008, at approximately
9:08a.m., CC-1 used CC-1 Landline B to call RAJARATNAM. CC-1
said that s / he had spoken with the AMD Executive, who told him/her
that AMD could be left with less than $3 billion in debt.
m. On or about August 27, 2008, at approximately
1:11 p.m., RAJARATNAM called CC-1 on CC-1 Landline B. CC-1 said
that s/he "could get fucked if [AMD stock) is up 30 percent."
Based on my experience and my review of other intercepted
communications, I believe that CC- 1 meant that s/he was afraid
that if AMD were up 30 percent, s / he would make so much money that
his/her trading might attract the attention of regulators. CC-1
asked RAJARATNAM if s/he should be "showing a pattern of trading"
AMD stock. RAJARATNAM said, "I think you should buy and sell, and
buy and sell." He also emphasized the importance of remaining
28
quiet: "On Akamai or IBH, anything , be radio silent. Like, you
know, I get shit on lots of companies." CC- 1 r eplied, "I'm radio
silent.''
n. Between on or about August 27, 2008 and
September 9, 2008, RAJARATNAM caused the Galleon Technology Funds
to purchase more than four million shares of stock in AMD.
o. on or about September 11, 2008, at
approximately 7:30p.m., RAJARATNAM used the Rajaratnam Cell Phone
to call KUMAR. KUMAR said that the announcement is "gonna be
October , first week. But it 's all on track ."
p. On or about September 17, 2008, at
approximately 1 0 :38 a.m., CC-1 used CC-1 Landline B to call
RAJARATNAM on the Rajaratnam Cell Phone. S/he told RAJARATNAM
that the AMD Executive said that the deal would be announced
during the first week of October. CC-1 a lso said that the AMD
Executive described the deal as "unbelievable. "
q. On or about September 23, 2008, at
approximately 1:25 p.m., RAJARATNAM called CC-1 on CC-1 Landline
A. RAJARATNAM and CC-1 discussed the timing of the announcement
of the AMD Reorganization. Later, told CC-1 , "I have
their numbers." Based on my experience and on other intercepted
wire communications, I believe that RAJARATNAM meant that he had
obtained material, nonpublic information regarding AMD's
for the quarter ending in September 2008. RAJARATNAM proceeded to
tell CC-1 that AMD's quarterly revenue was "1600" (which I believe
refers to $1 . 6 billion), that "processors" accounted for "1040"
($1 .04 billion), and that "graphics" accounted for "315" ($315
million) . RAJARATNAM told CC-1 that s / he "came to the right place
to get that information. Tell me I'm the best in AMD.... You
might know [the AMD Executive] or whoever. . . I wanted to compete
\lith you in your home yard, in your backyard.. . . I must defer to
you on IBM." CC-1 replied, "And too." RJI . JARATNAM
replied, ''Akamai , too. But AMD? Bring it on baby."
r. On or about September 29 , 2008 , at
approximately 7:15p.m., KUMAR called RAJARATNAM on the Rajaratnam
Cell Phone and left a voicemail. KUI'vlAR said, "I have the
information you wanted."
s. On or about September 30, 2008, at
approximately 2:21p.m., RAJARATNAM called CC- 1 on CC-1 Landline
A. Referring to the announcement of the AMD Reorganization,
RAJARATNAM told CC-1 , "the date is October 7th ." CC-1 later said
that s / he was "glad that we talk on a secure line, I appreciate
29
that.
11
CC-1 said that s/he was about being
investigated. RAJARATNAM adv ised CC-1 to buy share s of stock
and then to sell half before the announcement.
t. I n or about September 20081 RAJARATNAM caused
the Galleon Technology Funds and other affiliated hedge fund s to
purchas e millions of shares of stock in AMD . For e xample, on
September 30 , 2008 , RAJARATNAM caused the Galleon Technology Funds
to purchase 375,000 shares of at a price of $4 .98 per shar e.
At the end of September 2008, the Galleon Technology Offshore Fund
a lone held approximately eight million shares of AMD.
u. On Oct ober 7
1
2 008, at approximately 8:00a.m. ,
AMD announced plans to spin off its manufacturing operations in
the form of a multibillion-dollar joint venture with the Advanced
Technology Investment Company of Abu Dhabi ( "ATIC") . In exchange
for 56 percent o .f the fab (SO percent voting rights), ATIC would
pay $700 million to AMD1 and the fab would assume $1.2 billion of
AMD debt . In additi on, a different entity (also based in Abu
Dhabi ) would increase its investment in AHD to 19.3 percent. ATIC
committed to putting in to the fab at least $3.6 billion, and as
much as $6 billion, of additional funds over fiv e years.
v. On October 7, 2008, at approximatel y 9:30a.m.,
AMD s t ock opened trading at a price of $5.27 per share , up
approximately 25 percent ($1.04) over the prev ious day's closing
price of $4. 23 per s har e.
60. Based on my review of account statements and news
articles, as well as on intercepted wire communications , I believe
that the Galleon Technology Funds did not profit much, if at all ,
from the trading in AMD stock described above due in part to t he
global f inancial crisis that precipitated a broad decline in stock
markets in or about September and October 2008. Between the date
on which t he Galleon Technology Funds began to acquire shares o f
AMD stock (August 15, 2008 ) , and the eve of the announcement of
the AMD Reorganization (October 6, 2008) , shares of AMD stock fell
f rom approximately $5 . 87 per share to $4 . 23 per share (28
percent ) . The announcement of the AMD Reorganization caused the
share price to open up approximately 25 percent (at $5.27 per
share) , but the v alue of AMD stock subsequently declined again
along with the broader market sell-off. By the end of in or about
October 2 008, the price of Al<ID stock was approximately $3.50 pe r
share. RAJ RAJARATNAM, the defendant, caused the Galleon
Technology Funds to sell a relatively small portion of their
shares of AMP stock immediatel y following the announcement.
Specifically, on October 7 , 2008, RAJARATNAM caused the Galleon
Technology Funds to sell approximately 1
1
326,150 shares of AMD at
30
a price of $5.07 per share. Most of the shares, however, were
held until at least later in October 2008, by which time the value
of AMD stock had fallen below the prices at which the Galleon
Technology Funds had acquired the stock.
Insider Trading in the Securities of PeopleSupport
61 . Based on my review of public records, news reports,
~ l p h o n records, account records for the Galleon Technology
Funds and RAJIV GOEL, the defendant, and intercepted wire
communications occurring over the Rajaratnam Cell Phone, I have
learned the following:
a. On or about March 3, 2008, Galleon Management,
L.P. filed an Amended Statement of Beneficial Ownership (Form sc
13D/A) with the SEC regarding its ownership of stock in
PeopleSupport. The filing indicated that Galleon Management, L.P.
and affiliated entities owned more than 5.7 million shares (25
percent ) of the outstanding common stock of PeopleSupport .
b. Included as an exhibit to the filing of March
3, 2008 was a letter from PeopleSupport to certain Galleon
entiti es dated February 29, 2008 . The letter confirmed that,
subject to certain conditions, PeopleSupport would undertake to
increase the number of directors constituting its Board of
Directors from seven to eight, and to elect a "Galleon Designee"
to fi ll the vacancy created by such increase .
c. On or about March 5, 2008, PeopleSupport
elected an employee of Galleon (the "Galleon Designee" ) to its
Board of Directors.
d. Beginning on or before March 12, 2008, the
Galleon Designee provided RAJ RAJARATNAM, the defendant, with
Inside Information regarding PeopleSupport. For example, on or
about March 12, 2008, at approximately 8:49p.m., the Galleon
Designee called RAJARATNAM on the Rajaratnam Cell Phone to discuss
PeopleSupport's stock buyback. The Galleon Designee indicated
that PeopleSupport had purchased 200,000 shares in the past two
days.
e. On or about May 2, 2008, the Galleon Designee
discussed PeopleSupport with RAJARATNAM on the Rajaratnam Cell
Phone. The Galleon Designee told RAJARATNAM that PeopleSupport
had previously announced that it expected annual revenues of $160-
170 million, but that the company could probably achieve only $158
million. The Galleon Designee estimated that , based on what
PeopleSupport planned to announce the following week, "the stock
31
will not go down that much. It's gonna go down a little bit, but
it's gonna hold between $9 and $11 . . .. " The Galleon Designee and
RAJARATNAM then discussed a potential acquistion of PeopleSupport,
and whether Galleon would make money on its investment in
PeopleSupport were PeopleSupport to be acquired for approximately
$12 or $13 per share. Later, RAJARATNAM shared with the Galleon
Designee Inside Information regarding Spansion, among other
compani es, and discussed with the Galleon Designee the creation of
an "email trail" to "protect ourselves."
f. On or about August 4, 2008, PeopleSupport
announced that it had agreed to be acquired by Aegis BPO, a
subsidiary of India's Essar Group ("Essar"), for $250 million.
Pursuant to the terms of the transaction, shareholders of
PeopleSupport would receive $12.25 per share, a premium of
approximately 29 percent over its previous closing price, on
August 1, 2008, of $9.53 per share.
g. On or about August 26, 2008, at approximately
4:52p.m., the Galleon Designee called RAJARATNN1 on the
Rajaratnam Cell Phone . The Galleon Designee discussed SiRF
Technology Holdings, I n c., and then the Ga lleon Designee told
RAJARATNAM that "we had a Board meeting today in PeopleSupport."
The Galleon Designee and RAJARATNAM discussed whether RAJARATNAM
would support Essar's proposed buyout of PeopleSupport, and if so,
whether the Galleon Designee could announce such support at a
PeopleSupport Board meeting the following week.
h. On or about October 6, 2008, at approximately
3:50p.m., the Galleon Designee called on the
Rajaratnam Wor k Phone. The call lasted approximately 11 minutes.
i . On or about October 7, 2008, a t approximately
8:30 a,m., PeopleSupport announced that it had received a request
from Essar to delay the closing of its acquisition of
PeopleSupport to a date not later than October 31, 2008. At 9:30
a . m. , PeopleSupport stock opened at $11.33 per share, down
approximately 9 percent over the previous day's closing pri ce
($12.01} due to investors' concerns that deal with Essar might
fall apart. The stock price reached an intra-day low of $8.95 per
share before closing, at approximately 4:00p.m., at $9.25 per
share .
j. On or about October 7, 2008, at approximately
1:09 p.m., RAJARATNAM logged into GOEL's personal account at
Charles Schwab using an IP address assigned to Galleon and
purchased 30,000 shares of Peopl eSupport stock for GOEL at a price
32
of $9.50 per share . At approximately 1:46 p.m., GOEL called
RAJARATNAM on the Raj aratnam Cell Phone. RAJARATNAM explained to
GOEL that the acquisition of PeopleSupport by Essar .was "supposed
to close on Tuesday," but that the date was now being moved to
Oct ober 31. Referring to the Galleon Designee, RAJARATNAM said,
"We know - because one of our guys is on the Board - we know that
they're gonna put 41 million dollars in escrow. It's a 250
million dollar deal, right? And I know they're gonna close before
October 31st ." RAJARATNAM said -that it was "an opportunity for me
to buy for you." RAJARATNAM then explained to GOEL that he had
logged into GOEL's account at Charles Schwab to purchase 30,000
shares of PeopleSupport stock.
k. On or about October 7, 2008, at approximately
7:48p. m., PeopleSupport and Essar announced a schedule for
completion of the merger transaction. Essar confirmed its
intenti on to complete the acquisition of PeopleSupport, and also
reaffirmed that the transaction was not subject to financing. On
the following day, PeopleSupport stock opened at $11.21 per share,
up approximately 21 percent over the previous day's closing price
($9 . 25 per share).
1. On or about October 9, 2008, 30,000 shares of
PeopleSupport i n GOEL's personal account were sold at a price of
approximately $11.23 per share, yielding a profit of approximately
$50 t 000 lQ
10
In addition to the foregoing, I spoke to another agent
who had reviewed a consensually recorded conversation involving
two individuals, one of whom had previously spoken to RAJ
RAJARATNAM, the defendant . That individual said that RAJARATNAM
was told to be careful and that RAJARATNAM, in response, had
expressed the view that a former employee of the Galleon Group
was likely to be wearing a "wire." Furthermore, I learned,
during the early morning hours of October 15, 2009, from
conversations with an individual at the Office of Customs and
Border Protection, that a plane ticket had been purchased in the
name of RAJARATNAM on October 14 , 2009, for travel, on October
16, 2009, from John F. Kennedy airport, New York, New York, to
Heathrow airport in London, England. I further learned that a
plane ticket had been purchased in the name of RAJARATNAM for a
return flight to New York, New York from Geneva, Switzerland on
or about October 22, 2009. I als"o learned through pen register
data that a phone call was placed from the Rajaratnam Cell Phone
to a telephone number that I believe to be used by one of
RAJARATNAM's family members at approximately 3 : 00a. m. this
morning.
33
WHEREFORE, deponent prays that arrest warrants be issued
for the above-named defendants and that they be imprisoned or
bai led as the case may be.
FEDERAL
to before me this .
of October, 2009
.,

34
1
2
3


l 5
6
7
8
9
10

12
13
14
, . 15
1.6
17
DAVID W. SHAPIRO (NYSBN 20540=t)f r :(r- r:!;
Uru
.ted States Attorney s< :; !,
if
J. DOUGLAS WILSON (PSBN 44915)
FfLED
Chief, Criminal Division
JUH Z5
S 46 4H 'OZ
PATRICK D. ROBBINS (CSBN 152288)
Assistant United States Attorney
450 Golden Gate A venue, 11th Floor
San Francisco, California 94102
Telephone: (415) 436-6815
Attorneys for PIa inti ff
W. WIEKINC
, CLtP.K
U;S. O.IS IR!CT COURT
HO. OIST. OF CA. S.J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DMSION
UNITED STATES OF AMERICA, )
)
No. CR-01-20029-JW

Plaintiff,
V.
l
UNITED STATES' SENTENCING
MEMORANDUM AND MOTION FOR

ROOMY KAHN,
Defendant.
)
)
)

___________________________ )
Date: July 1, 2002
Time: 1:30 p.m.
Place: Courtroom No. 8, 4th Floor
UNDER SEAL
18 L INTRODUCTION
19 On February 28, 2001, the united States Attorney filed a one count Information charging
2 o defendant Roomy Kahn ("Kahn") with wire fraud in violation of 18 U.S.C. 1343. On April3,
2 1 2001, the defendant pleaded guilty. Defendant's sentencing is set for July 1, 2002.
2 2 The United States has received and reviewed the Final Presentence Report ("PSR")
23 prepared by Probation Officer Sonia Lapizco. For the reasons outlined below, the United States
24 respectfully disagrees with the PSR's final Sentencing Guidelines ("Guidelines") calcuJations .
.2 5 The United States believes that the adjusted offense level should be 10, with a sentencing range
2 6 of 6- 12 months, rather than offense level of 13 and sentencing range 12-18 months recommended
27 in the PSR. The United States concurs that Kahn's Criminal History Category is I, that the

. 80CUMEN NO CSA'
2 s appropriate supervised release term is 3 years, and that the appropriate fine range ts $3,0 to tNm. ;
$30,000, and that the appropriate restitution range is $70,000 to $120,000.
l. The United States further reconm1ends a three level downward departure, to level seven
2 (or to level 10 ifthe PSR's calculation is adopted) because the defendant has provided the United
3 States with substantial assistance in the investigation of another person, justifying a departure
4 under Guidelines 5Kl.l. This departure would result in a sentencing range ofO to 6 months (or
5 6 to 12 months according to the PSR). In either case, the United States recommends a sentence
6 of probation, with the condition that the defendant serve 6 months in community confinement
7 pursuant to Guidelines 5Cl.l(c)(3), a fine of$30,000; a three year term of supervised release,
8 and restitution to Intel Corporation, Inc. ("Intel") in the amount of$120,000.
9
10 ll. FACTUALBACKGROUND
At the time of her offense, Kahn was employed as a Product Marketing Engineer for Intel.
12 Her position afforded her access to a highly confidential Intel docwnent known as a "book to
13 billing" report. This document contained some of Intel's most closely guarded customer order
14 information. It listed the nwnber of chip orders booked by several dozen major personal
1.5 computer manufacturers, as well as the number of chips actually shipped. From the document,
1.6 one could discern Intel's probable financial performance for the current and su"bsequent quarter.
17 In early 1998, Intel became concerned that its internal financial information was being
1S leaked because an analyst at Needham & Co., Rajesawry Rajaratnam, was predicting intel's
19 revenue with extreme accuracy. Rajaratnam subsequently quit Needham and founded his own
2 0 high-tech hedge fund (Galleon Management, Inc.), which he quickly built from nothing to $800
21 million under management. Intel nevertheless began a monitoring program to determine whether
2 2 anyone at Intel was dialing number. They learned that Kahn dialed it several times,
2 3 and sent faxes to Galleon as well.
24 On its own initiative, Intel set up a hidden video camera at the fax machine. On March 6
2 5 and 24, 1998, the camera recorded Kahn faxing the "book to billing" reports for the three primary
2 6 Intel Pentium processors for the prior week. In addition, on March 24, Kahn faxed several
27 handwritten pages. According to Intel's CFO, the notations represent Intel's Average Selling
2 a Price (or "ASP"), and Units Sold for the first quarter of 1998. By multiplying those numbers,
GOV'T SENT. MEM. -2-
{No. CR-0120029JW] [UNDER SEAL]
1 one can determine IntePs total revenue for the quarter. One could also compare the Ql ASP wtth
2 prior, publicly announced quarters, and determine how well newer, more profitable chips were
3 selling. The "book to billing" reports also contained wilts sold information for every major PC
4 maker for the quarter, thus providing one key component of non-public financial performance for
5 each of those companies as well.
6 Kahn signed a confidentiality agreement when Intel hired her. The "book to billing''
7 reports and ASP information are closely guarded, and tightly distributed within Intel. The reports
8 were each marked "Intel Confidential." After Intel fired Kalm (without disclosing its knowledge
9 of the theft}, Kahn went to work for Rajaratnam's company, Galleon.
10 Once confronted by FBI agents about the theft, and after she retained counsel, Kabn
11 entered into a plea agreement with the United States and began to cooperate in an investigation
12 into Rajaratnam's practices. She submitted to several debriefings, described her activities and
13 those of other individuals involved in Rajaratnam's efforts to obtain material, non-public
14 information at several publicly traded companies. The FBI and SEC investigation into
15 Rajaratnan1 's activities is continuing. After an exhaustive analysis of the labyrinth of accounts
6 associated with Galleon, however, the SEC/FBI has not been able to show that any Galleon trade
17 resulted from Rajaratnam's possession ofthe information stolen for him by Kahn from Intel.
18
19
20 A.
III. DISCUSSION
APPLICABLE GUIDELINE CALCULATION
21 Kahn has been convicted of wire fraud. The applicable Guideline at the time of the
2 2 offense was 2F 1. 1. That provision requires an estimate of the value of the loss resulting from
2 3 the scheme to defraud. As far as the FBI and SEC have been able to determine, after a fairly
2 4 extensive investigation, Ms. Kahn did not personally profit from her theft of information. The
2 s theory under which she was prosecuted for wire fraud was the "deprivation of honest services"
26 variant of a scheme to defraud. See 18 U.S.C. 1343 ( .. For purposes of this the term
2 7 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible
2 8 right ofhonest services."); United States v. Lemire, 720 F 2d 1327 (D.C. Cir. 1983). The parties
GOV'T SENT. MEM. -3-
[No. CR-01-20029-JW] [UNPER SEAL}
J. agreed in the Plea Agreement that a reasonable estimate of the loss amount here was between
2 $70,000 and $120.000. This agreement attempted to account for the loss to Intel ofKahn's
3 services as a result of her disloyalty and theft.
4 The base offense level under 2Fi.l is 6. The loss amount adds 6levels. With an
5 offense level of 12, Kahn would be entitled to a 2 level downward adjustment for acceptance of
6 responsibility (which all parties, including the PSR, agree is appropriate). See 3El.l. Kahn
7 would have a final offense level of l 0. With a Criminal History Category of I, her sentencing
8 range would be 0 to 6 months, in Zone A of the Sentencing Table.
9 The PSR suggests two upward adjustments, however, with which the United States
10 respectfully disagrees. First, the PSR would add 2 levels to the offense level for more than
11 under 2FI.l(b)(2)(A). PSR 20. Second, the PSR would add 2levels for
12 an "abuse of position oftrust or use of special skill" under 3Bl.3. PSR 22. These
13 enhancement would result in an offense level of 16 before any adjustment for acceptance of
14 responsibility, which is 3 levels rather than 2. See 3El.l(b) (permitting additional level
15 reduction for o.ffense levels of 16 or more). With a final offense of 13, Kahn's sentencing
16 range under the PSR 's calculations would be 12 to 18 months, in Zone B of the Sentencing
17 Table.
18
19 B. AN ADJUSTMENT FOR ''MORE THAN MINIMAL PLANNING" IS INAPPLICABLE
2 o The PSR adds 2 levels under Guidelines 2Fl.l (b )(2)(A) on the ground that the
21 defendant's conduct involved more than minimal planning. Under Guidelines lBl.l(f) ''more
22 than minimal planning .. means "more planning than is typical for commission of the offense in a
23 simple form." See also Guidelines lBl.l Application Note (f). ("More than rrtioimal planning"
2 4 exists where the defendant takes "significant affirmative steps ... to conceal the offense" or
2 s "repeat[s the illegal] acts over a period of time, unless it is clear that each instance was purely
2 6 opportune.").
21 Kahn did not take affinnative steps to conceal her conduct. Although she briefly denied
2 a the conduct when confronted by the FBI, she corrected her statements, agreed to plead guilty and
GOV'TSENT. MEM. -4-
[No. CROI -20029-IW) [UNDER SEAL]
1 cooperated with law enforcement. The evidence obtained during the investigation reveals that
2 Kahn's acts occurred on two occasions (March 6 and 24, 1999). The first involved the backlog
3 and billing report. The second involved Kahn's handwritten calculations of the Average Selling
4 Price and units sold for Intel's microprocessorY Having reviewed the evidence and debriefed
5 Kahn, the United States' view is that these disclosures fall closer to an opportunistic offense in
6 its "simple form" tba:n they do to a complicated, well-planned scheme that spanned a long period
7 of time. It therefore asks the Court not to apply the upward adjustment.
8 c. AN ADJUSTMENT FOR ABUSE OF A POSITION OF TRUST IS INAPPLICABLE
9 The PSR adds two levels under Guidelines 3B 1.3 on the ground that Kahn abused a
10 position of private trust. First, Kahn was charged by information with using an interstate wire
11 communication to execute a scheme to defraud and to deprive her employer, Intel, of its
12 intangible right to her honest services as an employee. The offense itself necessarily involves a
13 breach of the trust inherent in the employee/employer relationship. Therefore, the abuse of trust
14 is arguably already found within the base offense level WJder Guidelines 2Fl.l. See Guidelines
15 '1 3Bl.3 ("This adjustment may not be employed if an abuse oft:tust or skill is included in the .ft
16 base offense level or specific offense characteristic.").
17 More importantly, Kalm was not a supervisory level employee at Intel provided with
18 "professional or managerial discretion." Guidelines 3B 1.3, Application Note L She was a
19 lower-level marketing employee, who had access to the stolen information in the ordinary course
-
20 of her employment tasks. The Application Note to 3Bl.3 makes clear that the enhancement is
21. meant for persons "subject to significantly less supervision than employees whose
22 responsibilities are primarily non-discretionary." Kahn appears to be more like "the ordinary
2 3 bank teller or hotel clerk" identified in the Note, whose positions are not characterized by
2 4 discretion. In addition, although Kahn possessed certain financial skills, Intel apparently did not
25
26
27
28
!I Although Kahn admitted in her cooperation debriefings that she sent booking reports
on other occasions, this information cannot be used at sentencing. U.S.S.G. lB 1.8(a). The
PSR's relies on these other thefts- disclosed by Kahn in immunized debriefings - in seeking the
enhancemenl See also Plea Agreement 1 I 5 ('The government agrees not to use any statements
made by the defendant pursuant to this agreement against her. __ ."}-
GOV'T SENT. MEM. -5-
(No. CR-01-20029-JW) (UNDER SEAL]
1 hire her as a result of those skills. She was assigned to marketing, not to a financial control or
2 analysis position. Consequently, it is difficult to conclude that her position at the company
3 resulted from the special skill that facilitated her offense (her ability to extrapolate the ASP and
4 unit figures to calculat.e quarterly revenue). The United States respectfully asks that the Court
5 not impose thls enhancement.
6
7
8
9
10
11.
12
13
14
D. THE DEFENDANf SHOULD RECEIVE A TWO LEVEL DOWNWARD
DEPARTURE ON THE BASIS OF HER SUBSTANTIAL ASSISTANCE
In exchange for Kahn's complete and truthful cooperation with the United States, the
government agreed to file a motion pursuant to 5Kl . l for a downward departure. Plea
16. Accordingly, based on the nature and quality of Kahn's assistance in an
ongoing investigation, the United States files this motion for a further three level downward
departure, which in the United States' view is justified by the defendant's post-plea assistant thus
far to law enforcement in the investigation of Rajaratnam. The investigation is not complete.
However, it is unlikely that further assistance will be required from Kahn in the short tenn, and
15 ;; ,\ i)
16
17
18
19
20
2l.
22
23
her sentencing at this time is appropriate.
Section 5Kl.l ofthe United States Sentencing Guidelines enumerates five factors which
the Court may consider in addition to otheJ:s in determining whether to grant the government's
motion for downward departure based on a defendant's substantial assistance. The United States
believes that defendant Kahn's assistance satisfies factors (2), (3) and (5) and respectfully
recommends that the Court find w1der factor (1) that her assistance has been significant and
use.ful as described below.
Factor (2): The truthfulness. completeness. and reliability of any information or
2 4 testimony provided by the defendant.
2 5 All of the federal agents who questioned the defendant found that the information she
2 6 provided with respect to her involvement and the involvement ofR.ajaratnam in the offense was
2 7 truthful; that the infonnation was complete; and that it was reliable. The defendant was
2 8 debriefed on three separate occasions by Assistant United States Attorneys from two districts
GOV'T SENT. MEM. -6-
[No. CR-Ot-20029-JWJ [UNDER SEAL]
l (Northern California and Brooklyn, New York), as well as agents from the Federal Bureau of
2 fuvestigation and lhe Securities and Exchange Commission. Kalm provided consistent details
3 regarding her crime, the involvement ofRajaratnam, and others involved-with Rajaratnam in
4 providing information at other public companies.
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6 Factor (3): The nature and extent ofthe defendant's assistance.
7 Kahn fully accepted responsibility for her actions in this case, and provided useful
8 information during her discussions with federal law enforcement agents. The defendant's
9 information regarding the involvement ofRajaratnam in the scheme to defraud Intel was
10 corroborated by independently obtained evidence. It h.as not led to the prosecution of Rajaratnam
ll at this time for reasons unrelated to the quality ofKahn's assistance. Based on information
12 obtained to date, Rajaratnam cannol be tied to illegal insider trading c01mected to the Intel
13 information. He also did not provide any monetary payment for the information. The
l4 investigators nevertheless consider Kahn's information to be useful from an intelligence
15 standpoint, and continue to investigate several leads she provided with respect to other sources of
l6 information for Rajaratnam. The FBI and the SEC anticipate tl1at Kahn's information may be
17 useful in connection with other possible criminal activity on his part, unrelated to CnteL
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l9 Factor ( 4): Any iniurv suffered. or any danger or risk of injury to the defendant or her
family resulting from her assistance.
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The United States acknowledges that this factor does not weigh in favor of the downward
departure reconunended herein. To the best f t h govelllil!ent's lmowledge, the defendant's
status as an informant has not been disseminated. There is no indication that Rajaratnam or any
associate is dangerous or would pose any risk of physical harm to Kahn.
Factor (5): The timeliness of the defendant's assistance.
Defendant Kahn's cooperation began as soon as she retained an attorney, prior to the
government's charging decision. She entered into a plea agreement immediately, and submitted
GOV'T SENT. MEM. -7-
[No. CR-01-20029-JW] [UNDER SEAL]
1 to multiple debrie fings whenever requested by the government. The infom1ation was timely, in
2 that it allowed investigators to obtain relevant records and to corroborate other information they
3 bad independently obtained. The United States' motion is tempered only by the fact that the
4 investigation is ongoing. The United States Attomeys Offices involved have thus far declined to
5 bring criminal charges against Rajaratnam based on factors that have nothing to do with Kahn' s
6 cooperation. In the government's view, she is nevertheless entitled to some credit for her efforts,
? which otherwise meet the factors set forth for a departure in the Guidelines.
8 IV. CONCLUSION
9 For the reasons stated above, the United States recommends a 3 level departure for
l 0 substantial assistance under 5Kl .l . If the Court agrees and adopts the Guidelines calculation
11 proposed by the United States, Kahn's offense level would be 7 (0 to 6 months); if the Court
12 adopts. the PSR's calculation, the offense level with the departure would be 10 (6 to 12 months).
13 In either case, the United States recorrunends a sentence of probation with the condition that
1.4 Kahn spend 6 months in community confinement. The offense of conviction provides for a 3
1.5 year terrn of supervised release. Given Kahn's fmancial situation, the United States recommends
16 a fine at the high end of the applicable range, $30,000, as well as $120,000 in restitution to Intel.
17 Kahn must also pay a mandatory $100 Special Assessment. The United States asks that the
18 Court require her to pay this amount at the time of sentencing.
19 DATED: June 24, 2002
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GOV'T SENT. MEM.
[No. CR-0 1-20029-JW] [UNDER SEAL)
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Respectfully submitted,
DAVIDW. SHAPIRO
United States Attorney
J. DOUGLAS WILSON

PATRICK D. ROBBINS
Assistant United States Attorney
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CERTIFICATE OF SERVICE
The undersigned hereby certifies that a copy of the following documents:
UN1TED STATES' EX PARTE MOTION FOR EXTENSION OF TIME TO
RESPOND TO DEFENDANT'S POST TRIAL MOTIONS
in the case ofUnited States v. Roomy Kahn Case No. CR-01-20029-JW was this date served by
facsimile to the following counsel:
Jolm L. Williams
Manchester, Williams & Seibert
84 W. Santa Clara Street, Suite 630
San Jose, California 95113- 6193
Fax: (408) 287-1554
Ms. Sonia Lapizco
U.S. Probation Officer
280 N. First Street, Suite 106
San Jose, California 95113
Fax: (408) 535-5206
I certify under penalty of perjury that the foregoing is true and correct.
or
Executed onJllll.e 24", 2002, at San Fram/1-sco, California.

KATIE CANNULI
Legal Assistant
U.S. Attorney's Office