From the moment he was arrested on Oct. 16, 2009, and taken away from his family until just before he was sentenced to prison, Raj Rajaratnam was under intense pressure to incriminate others whom the government suspected of insider trading, he recalled.
In particular, the authorities were after Rajat K. Gupta, and so they dangled the prospect of leniency in front of Rajaratnam — if only he would wear a wire and help nail Gupta, a former director of Goldman Sachs and Procter & Gamble who, the government says, conspired with Rajaratman. So why didn’t Rajaratnam cooperate?
“I am not going to do what people did to me,” Rajaratnam recalled thinking. “Rajat has four daughters.” And despite the government’s suspicions, Gupta is “a first-class person,” Rajaratnam said. (Gupta faced administrative charges from the Securities and Exchange Commission until they were dismissed in August, charges that his lawyer called baseless, as Main Justice reported.)
So instead of helping investigators get Gupta, Rajaratnam spurned their offer “so he could sleep at night,” as he recounted in an interview with Suketu Mehta of Newsweek, reported on The Daily Beast.
On Oct. 13, Rajaratnam was sentenced to 11 years in prison on the 14 counts of conspiracy and securities fraud that were brought by the office of U.S. Attorney Preet Bharara of the Southern District of New York. A jury convicted Rajaratnam, once a famed and immensely wealthy hedge fund titan, last May.
To hear Rajaratnam tell it, the pressure on him began the very moment a knock on the door interrupted his exercise-bike workout that early morning of Oct. 16, 2009. A posse of FBI agents had come to take him away. “Take a good look at your son,” an agent said, in Rajaratnam’s version of events. “You’re not going to see him for a long time.”
“Your wife doesn’t seem so upset,” the agency said, “because she’s going to spend all your money.”
The authorities dispute that story, according to The New York Post. “A number of his assertions are inaccurate,” said Ellen Davis, spokeswoman for Bharara. And Jim Margolin, a spokesman for the FBI in New York, said that comments Rajaratnam attributed to agents “were never uttered.”
One part of Rajaratnam’s story has the ring of certainty. He recalled that, at the beginning of an eight-hour interrogation, agents set a laptop in front of him and began replaying telephone calls in which Rajaratnam was heard discussing confidential information that the authorities said he used to make millions in illicit profits. The investigators had dozens of such tapes (see our earlier report), some made with the cooperation of Rajaratnam’s erstwhile friends who, unlike him, had chosen leniency over loyalty.
