Lawyers for Rajat Gupta, an Indian American businessman, stated that Raj Rajaratnam, the hedge fund executive who was convicted with a few traders from Galleon Group were bragging and exaggerating about the sources who provided inside information. One of the lawyers who made this statement was Gary Naftalis, who suggested this during a cross-exam conducted on a prosecution witness at a federal court in Manhattan. The witness was Michael Cardillo, a former portfolio manager at Galleon Group, who pleaded guilty.
Naftalis Questions Cardillo
Naftalis asked Cardillo whether there were others from Galleon Group, who stated that they had sources even though they did not. When prosecutors objected to this, District Attorney Jed Rakoff stated that Cardillo did not have to answer the question.
A week prior to this, Cardillo made a statement that in 2009, he traded on Proctor and Gamble stocks when he gathered information that Rajaratnam had someone on the board providing information. According to prosecution, the person was Gupta. Naftalis asked other questions to Cardillo. One of them was whether people discussed or exaggerated about the sources providing them insider information, during the morning meetings they had with Raj Rajaratnam. To this, Cardillo responded by saying that it did happen occasionally.
Naftalis Tries to Discredit Cardillo
According to Naftalis, Cardillo had allegedly carried a recording device on him to get information that would incriminate one of his friends. He went on to suggest that Cardillo had entered a deal with the government by agreeing to plead guilty to a securities fraud charge though he was charged for five other counts relating to stocks.
Wednesday, prosecutors provided evidence that Gupta’s key card was used to enter the offices at Galleon after 11:35 am on March 12th, 2007. Based on an entry in Gupta’s calendar, that was the time he was scheduled to have an audit meeting with Goldman Sachs to discuss the company’s Q1 earnings.