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Rajaratnam: Pressed to Turn on Friend

October 24, 2011
With his sentencing for insider trading behind him, Galleon founder Raj Rajaratnam gave his first interview.  Rajaratnam, who was given an 11-year sentence, was quoted as saying U.S. prosecutors pressured his to help gather evidence against his friend, former Goldman Sachs Group director Rajat Gupta.  Rajaratnam told Newsweek that he was initially asked on 10/16/09, the day of his arrest, to "wear a wire" and record conversations with Gupta, also a longtime global head of elite consultancy McKinsey & Co. Newsweek notes that Rajaratnam said he was approached again,as late as 2 weeks before his 10/13 sentencing in Manhattan federal court.  "They wanted me to plea bargain.  They want to get Rajat.  I am not going to do what people did to me. Rajat has four daughters."  [C-I Note: While that comment is hearsay, is Mr. Rajaratnam implying that he is hiding damning evidence against the former Goldman director?] The opinion of a Sri Lankan astrologist combined with a history of suspected persecution led to Rajaratnam's decision to fight the case, despite extensive phone taps and other overwhelming evidence, the report said. A spokesperson for the office of the Manhattan U.S. Attorney said in an emailed statement: "This article appears to be based on an interview with Mr. Rajaratnam and a number of his assertions are inaccurate."  A spokesman for Gupta's lawyer, Gary Naftalis, referred to previous statements that his client had done nothing wrong and that a civil case brought by the SEC was baseless. While the government's insider-trading investigation featured extensive use of secret FBI phone taps, it apparently did not capture Rajat Gupta.  Meanwhile, Rajaratnam, the central figure in a sprawling insider trading case, is scheduled to report to prison on 11/28/11. Nevertheless, Rajaratnam told the magazine he respected the U.S. justice system, saying he got his shot and that the "American justice system is by and large fair."    [Reuters, 10/24/11]