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IN DECEMBER 2006, Anil Kumar, a senior partner at the global consultancy firm McKinsey & Company, sent a two-word email to Raj Rajaratnam, the CEO of the Galleon Group, a multi-billion-dollar hedge fund based in New York. The email said, simply, “Manju Das.”
The words were a reminder to Rajaratnam of where to send a payment of one million dollars to Kumar. He had given the Galleon CEO valuable insider information on an upcoming corporate deal: the acquisition of the Canadian semiconductor company ATI Technologies by the American firm Advanced Micro Devices. Tipped off by Kumar as negotiations proceeded, Galleon built up a strong position in ATI, then sold all its shares after the sale was publicly announced. It made a profit of more than $20 million on the deal.
From around 2003 to 2009, Rajaratnam paid Kumar for insider information on a number of McKinsey clients, for whom Kumar served as consultant—among them Advanced Micro Devices, Spansion, eBay and Business Objects. The Galleon CEO sent quarterly payments of $125,000 to an offshore company called Pecos Trading, in Switzerland. This money was rerouted and sent back to Galleon in the name of Kumar’s domestic employee, Manju Das, and reinvested in Galleon’s funds.