Julian Dorey Podcast - 😎 #87 - Meet The Billionaire Who Took The Fall For Wall Street | Raj Rajaratnam

Episode Date: February 18, 2022

(***TIMESTAMPS in description below***) Raj Rajaratnam is an investor, author, and former hedge fund manager. He was the founder of the Galleon Group, a New York-based hedge fund. By 2009, Rajaratnam was the 236th richest American and managed $7 Billion at Galleon. However, on October 16th of that year, he was arrested by the FBI for insider trading, which also caused the Galleon Group to fold. In 2011, he stood trial in the United States District Court for the Southern District of New York and was found guilty on 14 counts of conspiracy and securities fraud. Raj received the longest insider trading sentence in American History (11 years) and was fined a criminal and civil penalty of over $150 million combined. He recently published a book called, “Uneven Justice,” where he tells his story and discusses the prosecutorial misconduct in his trial. He recently appeared on CNBC (with Andrew Ross Sorkin) and on Glenn Greenwald's Podcast to discuss the book. ***TIMESTAMPS*** 0:00 - Intro; Galleon’s Morning Meetings; The Media falsely painted the Raj Rajaratnam as “The Financial Crisis Case”; Raj explains the Financial Crisis basics; Southern District of New York Prosecutor Preet Bharara’s crusade against hedge funds; Raj net *lost* ~ $4 Million on the trades he was accused of (in his insider trading case); The Prosecutorial media blitz; Raj talks “greed” 23:20 - Raj recounts the day he was arrested in October 2009; Prosecutorial misconduct; The moment Raj went into “war mode”; Raj answered the FBI’s questions for hours without a lawyer; Raj talks Preet Bharara and how his case made Preet the Sheriff of Wall Street; Raj wasn’t the final target –– Steve Cohen was 45:48 - Raj explains why he is speaking out after all these years; What Rajat Gupta said to Raj in prison; The type of person who often becomes a prosecutor; The Bitcoin legislation an NYC Legislator cashed in on; Raj reacts to the Insider Trading in both Congress & the Senate in Washington DC 1:07:51 - The Ross Ulbricht Case (also prosecuted by Preet Bharara); Raj was the first White Collar Wiretaps Case; The Franks Hearing that should have suppressed the wiretaps; The government lied on the Title III Wiretaps application 1:29:18 - GOVERNMENT WITNESS 1: Roomy Khan; The meaning of the word “Edge”; Discussing the Showtime Wall Street Show, Billions; Goldman CEO Lloyd Blankfein’s testimony at Raj’s trial; RICO Law Creator & Title III Creator, G Robert Blakey’s Amicus Brief on Raj’s behalf 1:51:20 - Raj talks about why he respects Danielle Chiesi (DEFENDANT 1) and considers her “a gangster”; GOVERNMENT WITNESS 2: Ali Far; The EBay Trade story; GOVERNMENT WITNESS 3: Adam Smith; GOVERNMENT WITNESS 4: Rajiv Goel 2:19:33 - GOVERNMENT WITNESS 5 (The “Star” Witness): Anil Kumar; McKinsey, Payments, and Pecos Trading; The Manju Das Tax Shelter; The Preet Bharara India Diplomat Cavity Search Play 2:37:18 - DEFENDANT 2: Ex-McKinsey CEO / Goldman Sachs Board Member, Rajat Gupta; Kumar gave the opposite testimony in Raj’s brother Rengan’s Insider Trading Trial (he was found not guilty); Raj’s funds with Gupta and Kumar; Raj tells the story behind the 2 Phone Calls w/ Gupta from the cases ag... Learn more about your ad choices. Visit podcastchoices.com/adchoices

October 16th, 2009 is the day you were arrested. It was early on a Friday morning and you were arrested at your home in New York City. Did you have any inkling whatsoever that there could possibly be some sort of case or some sort of inquiry or question from the government around you, your company, or anyone associated with it? Absolutely not. Of the top 100 things I worried about, insider trading didn't make that list.

What's cooking, everybody? If you are on YouTube right now, please hit that subscribe button, hit that like button on the video. And as always, if you have a second, would love to see you drop a comment down If you are on YouTube right now, please hit that subscribe button. Hit that like button on the video. And as always, if you have a second, would love to see you drop a comment down in the video comment section as well. To everyone who has been leaving likes and comments on these videos, I say it every week, but it is a huge help. Thank you so much.

Let's keep it rolling. To everyone who is listening on Apple or Spotify, thank you for checking out the show there. If you haven't already, be sure to leave a five-star review if you can and follow the show on either one of those platforms, and I look forward to seeing you guys again for future episodes. Now, I am joined in the bunker today by Mr. Raj Rajaratnam, and if you're watching me on YouTube, you can see me holding up his book. It is called Uneven Justice. It's a very, very good book, and it's one that he wrote by hand from prison. So for those of you who don't remember Raj, he was the face of the financial crisis prosecutions, and regardless of whether you think he was innocent or guilty, it had nothing to do with that. This was an insider trading case. It's like the movie Wall Street from 1987, and raj has always maintained his innocence and his actions also prove that he was from the day he was arrested in 2009 he was given every chance to turn government witness and rat because he was never the guy they wanted they ultimately wanted steve cohen who

owns the mets now and is regarded as the best trader of all time and who the show Billions is based off of. So on their way there, they went after other huge investors and Raj, not for nothing, the guy, a lot of people today, if you talk to him off the record, will still say he's one of the 10 best investors to ever live, this whole thing notwithstanding. I mean, the guy was incredibly well-respected, brilliant, brilliant man. So they went after him, and he was the first in the line, and they expected him to just kind of turn over, and he didn't. He fought it in court, and even after he was convicted, the guy was – he got an 11-year sentence. It was the longest sentence ever to this day for an insider trader conviction or whatever it is on wall street but he was facing 20 to 25 and he was even offered after the conviction to help out the government and turn witness and get a lot of time shaved off a potential sentence and he still said no so you look at that and then you look at the case

itself i went back and i reviewed every piece of press on this case before I touched his book because obviously someone writes a book. It's from their perspective, so you have personal bias. And all the press was obviously negative. I had followed this case in high school, so it was fun going back in and looking through all this. But I wanted to get all that first to put the burden of proof on, well, let's see what he tells me book and let's see how much of it could could stand up to the thing the information we have access to publicly and i read his book and i gotta tell you it's concerning to say the least it's concerning to say the least and there are things for example like his trial actually never should have happened. He was the first white-collar case where the government utilized wiretaps ever, and those wiretaps were obtained illegally. They were obtained through a dishonest application that the government put in behind the scenes that was said in court by the judge, and they still allowed that evidence To be allowed at trial No wiretaps, no trial, quite simply So it shouldn't have even gone to trial

But even when it did There was a lot of problems there as well And you look at Raj I didn't ask the guy what his net worth was He didn't tell me I can do math though You know, the guy's a billionaire In spite of all this

He's a wealthy man, this is behind him now billionaire in spite of all this he's a wealthy man this is behind him now he's out of prison he's got a beautiful family great life he has every reason to go away but he's out here speaking out and taking the smoke

from an unpopular position as a hedge fund billionaire who got convicted to talk about things that are happening where the government overreaches in prosecution and the reason is because if it can happen to him it can happen to anyone he had unlimited access to resources he could spend dollar for dollar right with the

government and fight his case to the death and they still were able to do all these things to him so what does that say about the common man and to give something like that a platform is important to me so we did and we also it was fun We re-litigated the case. I challenged him on some things. There's certainly some questions I had along the way as far as like, well, why did that happen or what was going on here? So I will let you guys judge that for yourself. But I really, really appreciated this convo. I had to pick this up about 30 or 40 minutes in to us talking, by the way. And it was great from the start. I didn't want to do that. This is an episode I would have kept the whole thing. But I didn't want to make it – I didn't want this to be over four hours.

And so I picked it up where we got into it. And so that 30 or 40 minutes, whatever it is, I will probably post that as a clip next week so that you can have that as well. We talked about some backgrounds and things that are pertinent to stuff we were ending up discussing in the case. I thought it was really good. But again, I wanted to watch the length. So I will cut it there.

Thank you for listening to this intro. It was lengthier. I wanted to make sure we had some context. I think you're going to be very surprised by some of the things that you hear in here that a basic Google search will also show you did happen. That said, you know what it is. I'm Julian Dory, and this is Trendfire. Let's go. This is one of the great questions in our culture.

Where's the news? You're giving opinions and calling them facts. Everyone understands this, but few seem to do it. If you don't like the status quo, start asking questions. Information coming at you. And I think my biggest challenge as a manager at Galleon was to kill bureaucracy every time it cropped up.

Because you hated that at Needham. I mean, I hated it in boarding school. I hated it everywhere. What's better than a well-marbled ribeye sizzling on the barbecue? A well-marbled ribeye sizzling on the barbecue that was carefully selected by an Instacart shopper and delivered to your door. A well-marbled ribeye you ordered without even leaving the kiddie pool. Whatever groceries your summer calls for, Instacart has you covered.

Download the Instacart app and enjoy $0 delivery fees on your first three orders. Service fees, exclusions, and terms apply. Instacart. Groceries that over-deliver. And so these investors, if they wanted to know exactly what we were doing, they were free to come to our morning meetings. So they could just walk in the office. Just walk in the office and say, I'm an investor. And the reception would ask, who's your salesperson? And they would come to the meeting. And it was transparent. And some people said it was the best meeting they went to because many hedge funds were very secretive.

Now, I didn't send my portfolio out to all and sundry because that was our proprietary capital. But if you took the time to come into our offices, then, you know, I gave, we showed you how we worked. And I think that's one of the reasons we grew so rapidly because Inversa said these guys work hard every day they bring it, right? And sometimes it's intense. You know, we argue, we debate and bring it. And sometimes it's intense. We argue, we debate, and all of that, but it's open forum. So hypothetically, anyone who walks in there as an investor, once they hear whatever was said about the research,

they could go talk to whoever they want about that technically. Yeah, they could. But they wouldn't know my entire position how big a position i have or whether i was long or short the stock but if they hear but if they hear the information they're at least getting i mean frankly some of that maybe not the size of positions for sure like that's that's definitely no one's gonna be able to guess that but people can deduce like buy sell sell. Yeah, of course. They can get a feel like, oh, Raj likes this.

He doesn't like that. And then they can go talk about it. Correct. So even though there is the secret sauce world of it, which absolutely it's fair. It's pretty much what anywhere would do. You guys at least had something that other enormous hedge funds, and I'm not ripping. I'm just saying like they didn't really do this at that time i don't know now but at that time investors were not allowed to come into the trading side and you know the the engines of the company they had a pretty investor room where they would meet with somebody and you know talk about the business. Yeah. And when I was reading your book,

it really struck me some of the paradoxes that I would come across as to how things were painted in the media and for what I saw. And so you and I had a chance to talk a little bit before we were getting on camera. And I was telling you, I'm like, when your case was happening,

I was like 17 years old, 16 years old, and it was one of my first exposures to Wall Street. The story was very interesting to me. And the reason probably was because of the financial crisis itself. I was one of those guys who was very, very curious about little trends I would see around me. And so I would see the dad who pulled up to school in the Mercedes in September 2008 to pick up their kid. And then in April 2009, they're pulling up in a Honda. I would see restaurants where you'd walk in and it used to be 45 tables are filled. And now there were 13 or 14 filled. And I remember really watching that in real time because then I'd be like, all right, why is this happening?

And I would get some understanding of exactly what had gone on, not fully, but I would be like, OK, they created these products on Wall Street, kind of fucked over everyone, and here we are. And so the whole theater around it, the words Wall street are all you see so like you know you could hear something like your story in here hedge fund head or someone who's in charge of a hedge fund company and also hear them talk about lloyd blank fine who's in charge of goldman sachs and on main street someone like me it's all the same thing you know so we'll to – I want to get to that case in a minute and start talking about that and unpacking it. But when you look at how things played out for you and frankly, no matter what, regardless of innocence or guilt, you didn't have an opportunity to get a fair trial because it was tried in the media first. It's amazing to me that the narratives you see – and people could go Google this and look today. All the articles are still up – always painted you as the center of this conspiracy.

It was like this vast – like, oh, this guy is at the middle of the whole thing. It's his face on the middle of the board. They're out there paying off people for information. They're getting every little edge – they would use that word that everyone uses on Wall Street to get this – it's greed, right, to pack their bags and everything. A lot of the facts pointed out about previous actions that you did that would directly contradict that. And to me, one of the many things was the transparent meetings. Another thing that really struck me was the lack of lockups that you did during the crisis. And just as like a little background for people, at hedge funds, we can go through that whole model at some point, but a lot of hedge funds will have a lockup provision, meaning that you agree when you invest your money that at some point if the fund was having a problem with capital, meaning maybe a lot of investors start to call out their funds, they have the ability to say you're not allowed to take anything out for X period of time. It's called gates. Gates. You put in artificial gates.

That's it. Right. for X period of time. It's called gates. You put in artificial gates. That's it. So at the bottom of the financial crisis, when everyone and their mother was pulling out money from wherever they could, so this is end of 08 into 09, you made a decision to not put the gate up and you allowed any investor, and they did, by the way,

to take money in a short-term period, which, by the way, directly impacts your ability to have a bottom line at all. If you don't have money to invest, I mean the less money you have, the – Less fees you get. Exactly. And so things like this, when people see that, it's very different from a headline that says galleon guy at the middle of a conspiracy caught on phone on wiretaps. First time wiretaps were ever used to get somebody investing money and paying everyone off around the world to get whatever information he could.

There's a lot more to the story than that. I agree. I mean, you have to think about the times, right? At that time, the 2005, 6, 7, 8, when I came to this country, I believed in the news. I read the news every day. Sorry to hear that. This is when I came to this country.

I believed in law enforcement, that they were pure. Only bad guys went to prison. I didn't know a single person who went to prison. I didn't know anybody who knew anybody who went to prison. I thought the FBI did a fine job. I thought the FBI did a fine job. I thought the prosecutors did a fine job. I believe largely today that there are fine people in law enforcement, but the ones that are not so good or uber-ambitious,

there's no accountability. And I think in the last 10 or 15 years, over 1,000 cases have been overturned because of prosecutorial misconduct, whether there's withholding DNA evidence. And there's no downside to these people who sent others to jail because it advanced their career. But let me get back to what we were talking about. The 2008 crisis, the American financial system almost collapsed.

American households lost $7 trillion in wealth, and it was ignited by the mortgage crisis, where these banks were lending money to people who clearly couldn't afford to pay it back with balloon mortgages and things like that. A lot of malfeasance going on in the banking industry. And they were selling it off to other banks too. In some cases, banks were shorting the paper or the instrument that they were telling their customers to buy. For people that don't know, when you say shorting. That means they were betting that that instrument would go down while they're telling their clients,

this is the greatest thing you should buy it right away. Right? Yeah. Not a single banker was prosecuted. What they did instead, now me as a galleon, as a firm that buys and sells stocks, we had nothing to do with the mortgage crisis. Literally.

Literally. Literally. Zero. Nothing. Right? Yes. But we had a new district attorney, U.S. attorney for the Southern District. And rather than prosecute the banks, he came after a small slice of quote-unquote Wall Street

and came after me and Galleon personally. Their strategy was to play this out in the media because the public were looking for blood and the U.S. attorney was feeding the public what they wanted. I was advised by my lawyer not to respond. Because previously in another high... You're talking about after you got arrested. After I got arrested.

Meaning not to publicly say anything before your trial. Correct. And we also, the lawyers, said that they're not going to refute it. This case will be tried in court, and we were 100% sure that we were going to be exonerated. So we didn't give our side of the story. Very few journalists, and I don't think of a single U.S. journalist,

but a couple of British journalists went to Sri Lanka and looked at all the charitable work that I had done, including building houses for people who lost their houses in the tsunami, and gave a somewhat of a different picture than what the U.S. attorney was saying. They initially claimed that we made $25 or $30 million, and then eventually brought it up to $63 million. But the narrative was that I made that personally. I didn't make a single penny. If I was guilty of everything I did, the money went to the investors and the fund. The only thing you made was that you add a hedge fund. The way it works

is you charge 2% fee and 20% of profits you make yeah but you also lost 67 million dollars on these same trades no correct but they don't say that right now i gave to charity more than the 60 some odd million although net net i lost money if you did not disregarded the losing money part and they just you know uh this in just ingenuously said that i made i gave more to charity both in the u.s and in sri lanka more than the 60 some odd million they talked about so my question is how can you call me greedy right now when they filed the case when they arrested me and had this big press conference if you add up all the gains and losses on the eight stocks they talked about, I lost $20 million.

But that would not make, how do you arrest somebody for insider trading if you said that he lost $20 million, right? But they didn't, they called it the largest insider ring. They put me in the middle of several concentric circles with dotted lines to all these people 95% of whom I didn't even hear of and they made it seem like

this was the largest insider trading network and I remember one of the prosecutors or the SEC chief saying, Raj is not a master of the universe. He's a master of the Rolodex. That's Preet. Yeah. No, that was the SEC guy, right?

Yeah, Mr. Kusami, who used his Rolodex soon after my case to get a $5 million job at a leading law firm. So, yeah, it was played in the media and in many countries in the Western world and the British Commonwealth. That would be seen as deeply prejudicial. Also, an FBI agent who was part of my case, Chavez, in another case, the one with Walters, admitted that he was leaking information on the Walters case. But the judge just reprimanded him, and there was no accountability. Meaning he had prejudiced the public. I don't know if I used that word right there,

but he had basically... Leaked information to the public. Yes, that was not permitted to be leaked legally. Correct, confidential information and all of that. So the bigger point is it's not a fair system. If you get indicted, there's very little chance that you're going to win. Now, getting indicted is also a flawed process.

People say that in America you can indict a ham sandwich because the whole process is an ex parte process where only the prosecutor gets to present, the defense doesn't get to present. For example, in other Western countries, if there was an issue in front of a grand jury, the prosecution presents its case, the defense presents its case,

and the grand jury decides should we indict him or not. Here it's ex parte. It's just the prosecution that presents their case. Now, here's the truth in my case. The two witnesses that they used for the grand jury, one recanted his entire story. And about a month before my trial, say he'd made it all up. The second one was a person that was Rumi Khan, who was indicted for insider trading, not when she was,

she was at Galleon for about nine months, but when she was at Intel. And afterwards, when she started her own one man firm,-person firm, so twice indicted for insider trading, they believed allegations against me, even though there's no wiretaps with me and Rumi Khan or any conversation. And she was the chief person they used to arrest me and indict me. And they found her not reliable enough to put her on the stands. So the whole case, when you dissect it, was flawed. And, you know, I think one of the reasons I wrote the book was to expose to the American people how flawed the system is now. I know that Americans are fair people.

They want a fair or a level playing field. And that's all I ask for. And that was the motivation to expose a system where if you get indicted, the chances of winning are remote. All right. This is a good spot to back it up because I wanted you – that was a great answer. There were a ton of details right there. I'm sure people's heads are spinning a little bit, but I wanted you to continue on with that and kind of lay a bunch of groundwork

of a lot of the themes that we're going to be going through and picking off here. But that last point you were making about the process of justice and the lack thereof that there can be in the system, one of the things that is very, very interesting about – I hate that word, but it is a good word here. It's very interesting about you being someone coming out to talk about your case but also in the context of the system itself is that you are one of the people who has very little incentive to do so. In fact, one by one, week by week, we keep on converting new people over to my friends at Eight Sleep. And I love to hear this because it means you're all getting a way better night's sleep. Eight Sleep's proprietary technology is wired directly into their app that is wired directly into the product in question, which is the Eight Sleep Pod Pro Cover that comes in queen or king sizes and goes right on top of your current

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So if you use the link in my description, along with the code trendifier at checkout, that's T-R-E-N-D-I-F-I-E-R, you will get $100 off your own eight sleep pod pro cover today. And trust me, you will wonder how you ever lived without it. So check it out. The fact, the facts of the matter here are you're a very wealthy man. You were before you went in, and you are when you came out. And a lot of that is obviously from the life you built for yourself before any of this happened. And it's easy for the cynic to sit back and say a couple different things. Number one, okay, of course someone's going to be about criminal justice reform after they come out of prison like who isn't right number two all right this is a billionaire hedge fund guy

why does anyone want to listen to what he has to say regardless of of what those two points are or how you look at it sitting in in your seat as a listener right now or someone out in the public it doesn't mean that there is not significant truth or what I would believe after really going through your story inside and out over the past month that there's not really complete truth to what you're saying. on this podcast a bunch before you were ever coming on here there is a serious serious problem with the gamification of the system so it's easy for us to sit here and talk about police brutality or even issues with with racial discrimination in law which are absolutely real and and things that do need to be talked about but you also need to bring up the incentive structure that prosecutors and therefore the government have in bringing cases. So with you, we've already hinted at throughout our conversation today some of the issues around how the media litigated the case before it was ever litigated and we'll go through some more details that you described in your book that are insane about how the marketing arm of the government went into place and went into overdrive to be able to kind of paint whatever picture they wanted publicly not just of you but of anyone

attached to you and anyone who came after you on totally different cases around a similar topic and in my opinion it should be something that alarms everyone there there's issues in this country obviously where you hear about some of that suppression of evidence like you pointed out with guys who will literally be on death row who could be exonerated through dna evidence and you will see prosecutors go to court and say no no don't put that out there because what would happen they'd have to take an L in the case. They'd have a loss. And the line that I see between justice and winning has never been more blurred than it is now.

You know, it's just ironic how this all came together because my first, the first time I ever really thought about this, I'll never forget it. It was sometime like maybe 2014 2015 i can still see the conference and the report but it was on cnbc which i used to watch all the time andrew ross sorkin was teasing a conference that he was going to be at on stage that day and he was talking about how he was going to be talking to the sheriff of

wall street pre-parara and i knew who pre-parara was because i had heard some of this before but i remember cnbc midday on a trading day cut to this conference with andrew up there with with with preet and the way it opened up was something along the lines of andrew ross sorkin saying you're known as the sheriff of wall street. You have, and they have the camera on Preet while he's saying this, you have an 88 and O record or something like that against people on wall street.

And now there's rumblings out there that you may be going after another big fish. I think it was Steve Cohen at the time they were talking about, you know, how does that make you feel or something stupid like that? And I remember thinking to myself because they're showing the record on the screen like barara 88 and 0 against wall street crime i'm like isn't the point of cases to get to the truth and get justice versus what your record is

now obviously if the government had a prosecutor going 20 and 60 all right that might be a little bit of a problem but this whole brand quote quote unquote, being built around the fact that this guy had at the time an undefeated record against a certain subset of quote unquote criminals. I'm like, that just that seems off. And so I would look into it with other prosecutors over the years and see these greater problems like the DNA problems and other types of cases. And it became a theme for me. And so to hear from you and then get you on here as a guy who was really the first tip of the iceberg with Barrara in particular. Your case, I believe, was charged maybe like a month or two months into his stay as prosecutor, right? Correct, yep.

Okay. It's just – it's an incredible full circle experience for me, and I'm glad we get to talk about that topic. So that whole little monologue there aside, let's go back to this actual case because people heard you start to describe the outset of it, and we had talked about insider trading and defining that a little bit ago. But October 16, 2009 is the day you were arrested. It was early on a Friday morning and you were arrested at your home in New York City. Did you have any inkling whatsoever that there could possibly be some sort of case or some

sort of inquiry or question from the government around you, your company, or anyone associated with it? Absolutely not. Of the top 100 things I worried about, insider trading didn't make that list or make any list. When I heard a loud knock on my door, I was sort of perplexed as to what was happening. It was my son's birthday. He was just turning 13.

And so I answered the door and I said, who is it? And they said, FBI, open up. I opened it quickly. And there were, I don't know, 8 to 10 FBI agents in their traditional blue jacket with guns. Drawn. Drawn. And they asked me, are you Raj Raj Ratnam? And I said, yes.

And they said, you're under arrest. And I said, what for? And they said, we can't tell you. Go get dressed because I was in my workout clothes. Wait, they can't tell you? Not at that point. They'll tell you later when they take me down, right? Did they read you Miranda rights

when they did this? No. Not during the arrest. So I got dressed, they handcuffed me, and clearly they were trying to intimidate me because they told me to take a good look at my son. I'll never see him for 25 years.

And they said your wife... Who told you that? FBI Kang, Agent Kang, the lead agent. And he said, your wife looks happy because now she can spend all your money without any restriction. And my predominant feeling at that time was one of anger. And I went into what I call the war mode. We were going to battle.

Immediately? Immediately. I said, there's something wrong here. I was going to London that evening after my son's birthday party. Can you pull the mic in just a little bit? Yeah. There you go. And I told my wife, you know, don't cancel any tickets because this is a mistake.

And I went down. I didn't even call a lawyer. And then they told me that I was being charged with insider trading, and I was sort of even more perplexed. So when you went downtown with the FBI, they told you that? Yeah. And they handcuffed me, youuffed me right through my lobby. Everybody was out there. But anyway, they had cameras outside my building.

They had unmarked FBI cars along the street. And it was surreal. So I went in there. As in when you say cameras, the press was out there? Correct. So they tipped them. Tipped them. But I was sort of in a daze.

I didn't, you know, I later realized that. When I went in there, they started talking to me and wanted me to plead guilty and cooperate with them, neither of which I was prepared to do for something I didn't do. So they asked that right away. Yeah. You can help yourself. Then they read the Miranda rights, and they said, you can help yourself if you help us with certain hedge fund managers

and give a few names. But they didn't lay out to you because they said at some point when you went downtown, it was insider trading, but they didn't say what, when, or how they made the case or anything like that? None of that. Interesting. And then my wife called my office and they found a lawyer who called me after about two or three hours of interrogation. I had nothing to hide, so I sat with them and talked. And it was your typical good cop, bad cop, you know, one guy being good, one guy being bad, pounding the table, trying to intimidate me.

And it's interesting. You know, about two months or three months before my arrest, we had an ex-FBI agent, a consultant, come to us to give a half-day seminar on how to figure out whether company executives may be lying, how to look at body language. And I went in there for a couple of hours, but my analysts wanted to,

because they are meeting with these people and doing the analysis. And he was talking about these little techniques that they employ. One of them is that they never interview you at your office or at your home. They bring you to their office because that's a power play. Secondly, their chairs are a little bit higher than yours. So that's another power play. They're sitting up and you're sitting down, right? So the literal height of the chair is lower on the person being questioned. Correct.

The other thing they do is they handcuff you when you come in. And then during the entire interrogation, they handcuff you to a heater. So you sort of feel it's not an equal discussion. So you're not in like a – this isn't an interrogation room. You're sitting in the office. No, no. It is an interrogation room. But they handcuff you to a heater?

Well, there's a heater, you know, whatever heater. I guess I always just think of the table or whatever. No, there's a heater, which they did, right? And they kept asking questions and I answered them. It was sort of amusing to me because I had learned about these techniques a few months ago. So you were ready to go? I mean, I think sometimes I'm missing the fear gene, but, you know, I sat there and— And I'm sorry.

Did you say – I didn't catch this. Did you say a couple minutes ago they called you a lawyer to come down there? No, no, no. My wife called my office, Galleon, and Galleon found a lawyer, right? And he probably called me two or three hours into the interview, and he said, don't say a word. Tell him you have a lawyer. And so when I said I had a lawyer, they stopped interrogating me. So you did answer questions from them for at least two or three hours? Correct. But a lot of it was sort of intimidation, trying to get you to plead guilty and, you know, point fingers at others.

And I didn't realize at that time that if you became a cooperating witness and you helped the government get other defendants, you could get a reduced sentence or just parole. And in my case, all the three cooperating witnesses that did their crime away from Gallien all got parole. They stuck a deal if they testified against me. Which they did. Which they did. But here's the third thing about the Americans.

We talked about the media. We talked about the ex parte grand jury. The third thing is the use of cooperating witnesses that they actually coach. It's not cooperating willfully. It's coercion. They tell them what to say, and they meet with them several times. Again, as you mentioned, winning trumps getting the truth.

Now, if you look at the history of white-collar cases, typically you're asked to come down to the FBI or the U.S. Attorney's Office with your lawyer. Prior to any charges being filed. Correct. And then they say, we have this information. You get a chance to respond. And, you know, they decide whether to go ahead or not.

In my case, it was all drama and theater and was put on CNN and all the news. And based on my case, Mr. Barada was called the sheriff of Wall Street. And I must say that, you know, the publicity and the fame generally makes people do things that they regret later on. I'm not saying he's regretting it, but the last several years, he's talking about criminal justice reform. Since he left SDNY in 2017. Since he was fired by Trump, the SDNY. Yes. He published a children's book on justice is and said that all the money would go to charity much as, you know, my books proceeds would go to charity for criminal justice reform. While you're sitting in there, though, he's out doing a press conference.

Correct. And he's doing it with, I guess, the lead investigator at the SEC, too. Correct. And a couple other people. And they have all the media there, and this is that board you talked about earlier where it's just your face in the middle of all these lines looking like a giant conspiracy, which is what they called it, headed to you. And as it turns out, I think you said you didn't know like 90% of these people people which was actually something that even the media will admit in some cases on at least some of them. But he gets up there and drops all these bars for lack of a better way of putting it and pretty much declares war on Wall Street and uses your head on the stick as the first and the connotation was like we talk about marketing jobs i mean it was it's pretty brilliant job he's one two months into this chair where i guess at this point six seven months after the bottom of the market so shit is bad out there at this point.

Everyone is angry at Wall Street. You had the Madoff thing in March. That didn't help. But Madoff was like a separate crazy thing where also the prosecutors missed it for years. It was basically their fault that it went on as long as it did. And so people are looking for a boogeyman. And the average person out there who was one of the people who lost $7 trillion overall of their net worth, as you alluded to earlier, they're sitting there going, well, whose face is going to go on TV that we can point to and say that guy? And Preet got that in you.

Now, what I am definitely curious about is I don't – I think you were supposed to be a splash. I think you were supposed to be a splash. I think you were supposed to be a ripple. And this is me speculating right here, but I think I can make a pretty good case on this. I don't think Pree was expecting you to be the target. You were the big guy that day. You were the guy who they could start with. And he looked at you and said, here's the 236th richest American

on the Forbes list right now now who's the head of a hedge fund he's not originally from this country he's going to be naive on a few things in our justice system and we're going to throw a lot of prison time over his head and he's going to crack and we're going to tell him as you talked about cooperating witnesses we're going to tell him the guys we want to go after who are powerful people in this space, and he'll just – we'll keep getting to a bigger fish. And the biggest fish of all – I don't need to get to it right now, but it ended up being they wanted to go after Steve Cohen, who a lot of people regard as the greatest traitor of all time. And the funny thing about it, and it's another thing that makes your story so wildly, insanely interesting, is that you did none of what they expected you to do. So let me tell you a couple of anecdotes that were not in the book and not many people know.

And the name of your book, by the way, Uneven Justice? Uneven Justice, yeah. I got it right here on camera so people can look at it. It's a very good book. Go ahead. Do you know that the day they arrested me and since then, they never went to the galleon offices and took any file from us? Even after? Even after, till to this day. Is that because – I just want to ask this as a stipulation. Is that because the SEC had already had access to all that a couple years before on that separate thing?

No, they had access to some. Okay. But typically what you do is they seal off the offices and they make sure that you don't shred papers and you don't know what they have and that you don't have and all of that. I think the reason was they thought I would plead. They were 100% certain that I would plead. So you're right, right? A lot of the discussion was about that and intimidating me that, you know, you're going to spend 25, 30 years in jail.

But I think they underestimated my resolve to fight. Now, you made a comment that I want to just talk about. You said you have everything to lose and nothing to gain. I disagree, and the reason I disagree is this. When I went to prison, I met a lot of people who were bullied by the prosecutor to plead, who were given extraordinary long sentences. So my story was unique, and I had to speak up. And I don't know how. Yeah, I do have enough money.

I have a great family. My family stayed with me and all of that. But I felt that I had no choice but to bring this issue up. And maybe that's how I was wired. It may be the same wiring that didn't take a plea. And subsequently to me being arrested, they wanted me to testify against the chairman of McKinsey, managing partner Rajat Gupta, and I refused. So, and what did he say to you? Because he ended up, this was a sick twist of fate, but he ended up in the same prison you were, because he ended up getting found guilty.

Yes. And I heard him say this on TV, but what did he say to you when he first ran into you in prison? Well, he didn't say what he said on TV, but what did he say to you when he first ran into you in prison? Well, he didn't say what he said on TV. He didn't? No. He came to me and said, you know, let's talk. And, you know, and I said, okay.

And we went around the yard a couple of times. We had breakfast almost every day. We played some chess and some bridge. But we'll get into it in more detail later on. But he was upset about a leveraged vehicle that we had done with Lehman Brothers that went to zero. Yeah, we'll get to that. But did he say to you, you could have ratted on me, but you didn't?

Well, what he did tell the press was that I went to Raj and I said, you put me here. Yeah, I heard that part too. Yeah. Okay. And if he had said that, I would have told him that I didn't put you there. Preet Bharara put you there. The second thing he said was, I appreciate the fact that you didn't testify against me. And I said, yeah, I'm not going to say something that's not true.

And I could not live with myself. And this is, I want to bring some of these points together too, because I raised a few about what makes you unique at second glance especially because like you give that answer about, okay, I had – I have nothing to lose or whatever. And I guess you could dispute what I'm saying about you don't have a reason to come out. And the point you raise is that there are other people who have a lot riding on this. Yeah, I have a lot of reasons why I should write this book and come out and speak, right? I mean, I drove up two hours here to speak to you because I think it will help start a discussion about the criminal justice system. And right now is a great time because they have bipartisan support. Yes. But it's focused mainly, as I told you earlier,

on police brutality on the street because it's in your living room. With all the iPhones people bring it to your living room. But what happens in the courtroom doesn't necessarily come into the living room. There are hundreds of thousands of people who have suffered over the years at prosecutal overreach and misconduct but what gives the point i want to make here because all that's true but there there's a side credibility point here that that needs to be raised and that is you would be painted as your typical white collar hedge fund criminal who is just looking out for himself. That is the connotation people take, like, oh, he's a billionaire. He's looking out for himself. You had a chance to give up people at every step of the way, including after you were found guilty.

You had a chance to get on Team America and become a cooperating witness that you talked about earlier, other people doing against you, and you didn't. You knew, you learned after you got arrested that there was, I guess it's like a 97% conviction rate or something like that, which is on level with China and Russia when it comes to federal cases. You learned that you had all the chips stacked against you, and you went to trial. And there was never a question. One of the stipulations you gave all these defense attorneys you witnessed, which, by the way, another point, you didn't know any defense attorneys. You knew none. None. None.

So never for someone who had a conspiracy, you spent a lot of time not doing conspiracy covering things. I'm just saying. But you went out there and you ended up hiring a team basically blind to how this all works and said, all right, let's just go to trial because we didn't do anything wrong. And then when it came time for you to save your own ass, you never did. You went in and you took it and you stand here today out of prison talking about this and raising the point and not afraid to relitigate a few things as well. And so when people look at it and they look at incentives and they look at what what makes it different there's a lot here that makes it different it's not your it's not your typical like oh i got caught i'm sorry i got caught let's see like you didn't even speak for yourself at your sentencing hearing the judge offered you a chance to speak where you could

get up and and say you know because it's not like this was an egregious crime or something they painted it that way. But the judge knew. Like, even if the judge looked at it like, oh, this guy's guilty, you weren't sitting there cooking the books like Enron. This was nothing like that. If you had just gotten up and now said, like, okay, well, let me just apologize and stuff like that, you'd probably get more favorable sentencing. And you knew that. Yep.

But you didn't because you had nothing to say. No, I had nothing to say. Well, you had nothing to say on that. because he had nothing to say and there's no i had a lot to say well you had nothing to say on that say at that point yes i knew my time would come yes and i knew the truth would come out either through me or through others one of the reasons i say that i wrote the book is i want others on wall street to judge me, my peers, about innocent chit-chats about stocks are being used to criminalize defendants. If you look through a dirty peephole, what do you see? You see dirt. And that's what the prosecutors were doing. They had already presumed I was guilty. And now every conversation was presumed to be, oh, he's secretly talking.

They were open conversations. And what they told the jury was, oh, he's committing insider trading brazenly in the open. So they had a word. They were very clever. And I hope at some point we should talk about the mindset of prosecutors because I've spent a lot of time thinking about prosecutors and what type of person from law school goes to be a prosecutor as a first job and why and the career paths and all of that because I think therein lies understanding the prosecutor overreach and misconduct.

This was a big point you made in your book too where you talk about the incentive for people to go out into the private market after being a prosecutor. And the incentivization structure is that your record is good. So they are – they're in a position where not only do they want to take cases that they feel like they know they can win, but they're also guy's – maybe this isn't what we thought. There's not an incentive to stand up and say, you know what? We got justice today. This is not it. This guy or this a specific person that goes to it are you saying that let's say even like the majority of people who go to law school just would never want to do this job because there's not like a power they don't have that that grip that grip on power that they want or is it something different well i think let me make one thing clear. I'm not condemning all the prosecutors, all the FBI agents. That's important.

I think many of them are fine people. And you said – by the way, I want to say this. You said you still believe overall in the U.S. justice system. But it needs to change, right? Would you rather be a defendant in the U.S. or in China where you know, where they might shoot you for a white collar crime or whatever? But anyway, let's take a step back. The majority of judges today were ex-prosecutors. The majority of people in the Senate and Congress who have a legal, were ex-prosecutors.

Joe Biden being an exception, but Kamala Harris was an ex-prosecutor. She wasn't a good one either. Yeah. The majority of people who become prosecutors after a high-profile case join law firms as partners, so their career path is accelerated if they win high-profile case join law firms as partners so their career path is accelerated if they win high-profile cases. So winning high-profile cases is very, very important to the people who are very ambitious. And that thirst to win makes them bend rules. Here's a point I would make. If in any position you have zero accountability, zero,

that creates a lot of turmoil and mischief in many people. Yes. Right? So this fallacy that all prosecutors are fair-minded, searching for the justice and searching for the truth is not necessarily true. lawyers who were in the Southern District during this time have subsequently told me that they would have never bought this case. They should have never bought this case. Who told you that? Are you allowed to say? I don't want to give names, but there are lawyers who worked in the Southern District

who are now partners at other firms, maybe in defending white-collar crime. I've got to ask this, though. Do you think it's fair, though, that if someone – and I'm taking a connotation here, so if I'm taking this too far, let me know for what you mean. But do you think it's fair that someone who becomes a prosecutor, where you don't make a ton of money you're paid on a government salary do you think it's fair that to do that job you then essentially disqualify yourself from being a defense attorney one day or do you think

it's more the brazenness with which the system is set up these guys are always just looking for one case and then when they get it, they cash in, and that part needs to change. I think a mixture of both. Very rarely, unless you're the U.S. attorney, very rarely do prosecutors stay for more than five years as a prosecutor. It's a stepping stone to a career. If you take a look at my case, and if you look at many defense lawyers, they were all ex-prosecutors. In my case, Mr. Dowd was an ex-prosecutor. He's 60 or 65, and the prosecutors are 30 or 35. So they're in the beginnings of their career. And those are the guys who actually try your case in court. So pre i guess was like 40 or

something like that but he's just he's a big shot who decides whether to arrest me or not he's the when and i think people miss this sometimes but it's important to say when you're the head of the sdny or head of eastern district you're not generally speaking you're not the person in there arguing the case you're managing the lawyers under you and deciding who does. And you're deciding whether to charge somebody. Yes. Is my understanding. Yes. Now, if I told you, I'm going to pay you $100,000. If you look at a decision tree, you make $100,000 a year for two or three years. You win lots of cases. And then you go to a law firm for a million dollars after three years, four years, as opposed to go join a law firm. And in five years, you might or might not make a partner.

And you might make $200,000, $300,000, $400,000. What do you take? And the chances of winning are high. You know, that's the mental math. I'm not saying they physically do it. And this is why people in law school are attracted to being a prosecutor because it is a stepping stone for greater things.

I understand completely what you mean now. And I don't know i mean shit i don't have a great solution in mind because it is a free market but there is something that offends your spirit when you think about the fact that someone can so quickly go from standing in court and screaming bloody murder at let's say you and defending that three weeks later defending that there was yeah there was there's a documentary on netflix i've talked about this one once or twice before but there's a documentary on netflix a few years ago about like the basics of the early bitcoin revolution so it covered the winklevoss twins among other people and there was a famous hearing in new york city in like 2014 early on as bitcoin was early on becoming like new york city was

becoming a center for the global hub of bitcoin which now looking back on it that would have been nice to have and so what happens people in new york are incentivized to make a case out of it and legislate because when you're sitting around twiddling your thumbs what better to do than legislate so they call this giant public hearing they have all the biggest names in crypto including the twins up on the stand and the guy running the hearing is talking about what a danger and threat this poses to the great citizens of new york and all that and the end result is of course they put in this legislation that since then has also basically made anyone who was going to make a bitcoin hub in new york not want to do it there so it basically lost all the

business but within a year of him creating that legislation he got a giant contract for one of the major new york law firms where his specialty would be interpreting the fucking law that he just wrote. But you know, in insider trading, it's worse. Congress and the Senate are able to trade in material non-public information. And just as recently as two months ago, the Speaker of the House, Nancy Pelosi, said that Congress should be allowed to trade on information.

Now, let me ask you, if you're making a policy on healthcare and you want to reduce all pharmaceutical drug prices, would you want to own any pharmaceutical shares? You'd want to short them, bet against them. During the financial crisis of 2008, the Treasury Secretary, the Federal Reserve Chairman, and the Treasury, and one other federal researcher. Bernanke, Paulson was head of treasury.

Paulson and Geithner. Geithner, right. The three of them were giving privileged updates on the stock market. And 34 congressmen and senators immediately sold their shares. Tale is always time. Right? And this is the only law that I know of where the lawmakers have a special law for themselves

and there's another law for the citizens. I could think of a few others, but you're a thousand percent right. I know this one. Yes. So a lawmaker cannot murder somebody and get away with it right yeah and so you know but at least on paper yeah at least on paper here they're legally allowed to trade yeah is that fair did you see nancy pelosa like did you watch her response to that when she started getting asked about that a few months ago where they're like well would you support legislation about preventing congress people from trading she's like no we uh i i think we should be

allowed to participate and it's it is is fucking maddening but i imagine sitting in your seat it's got to be on a whole nother level yes soon after my other minutes did a piece on insider trading in among the politicians and congress and all that and it was just bizarre to me that so many people traded after getting updates from the three most powerful financial executives in the world, maybe in the country, right? And it's inconceivable that the American public is not outraged about it. But change takes time. There are more people paying attention now. I'll say that. There's more people who are raising it every day. There was a Twitter account that got banned by twitter somehow don't know why called nancy pelosi's portfolio or something like that and they'd put up the updates like every time that she had to legally give it and what had happened and it's amazing the

it's the people who are doing this stuff are clearly operating realizing that there is a double standard because they they literally can't hide it they have to disclose so you can see it you can see that what's her name the loffler the senator in georgia had a meeting on january 26 or whatever it was 2020 that we know was about coronavirus they have all the minutes of that and you could see that she sold all her minutes of that and you could see that she sold all her shit immediately and then you can see that towards the bottom she or at an optimal time i forget the exact dates she bought up i think it was her could be someone else if i'm getting the wrong person we'll check that later but she bought up like zoom and telehealth companies and stuff

and you're just looking at this like wait a second second. These are the same people who when a conviction happens against someone like you, they're sitting there going, justice was served today in the courts of New York. And it's like, what? Yeah, I mean, I've always wondered why somebody at the age of 75 or 80 won't run for re-election. And I couldn't figure it out. Because, I mean, that job, being a speaker of our house or the minority or being a senator, is a grueling job.

And they joined there to serve the people. I've always wondered, you know, at what time, at what stage would they just retire? I just read that Grassley, who was 88, is running for re-election. And I just don that Grassley, who was 88, is running for re-election. And I just don't know how these people think. It's a thing. You mentioned a lot of them used to be federal prosecutors, too. And it can go to some of that theme. And I don't understand it, but there are certain people who are more prone to actively seek out positions of – I won't even say authority. I'll use the word power because of the access it gives them.

And then there's a thing that I do think exists in everyone, literally all humans, that can be corrupted. And they just have a – they have a bigger node of that if that makes sense and and look could be is is it all of them no no do i like to believe it's all them yes because it's just like it offends something about you when you see some of the things these people say for political points and then the things they do openly and don't question and the hypocrisy there but it's fair to say a lot of them seem to have that and i don't know if you've seen this before but i have a chart behind you on the screen right there if you turn around for a second it's a little small text but what is what

is that bottom bar there say the gray one spy is spy okay so the So this is for the year 2021. I think this was 2020 or 2020. No, it's 2021. And what you see here, I'm going to put the chart in the bottom right hand corner of the screen for people to see who are watching. What you see is the bottom bar being the return on an annualized basis of the S&P 500. And everything above that, which is all beautifully blue and red, so it's a bipartisan issue here, as we can tell, are all the names of congressmen and women and senators who have, in many cases, significantly outgained the SPY. They should be professional money managers.

They should be hedge fund managers. You know what, Raj? Some of these guys are doing better numbers than you ever did. It's crazy. And they're doing it part-time. They're doing it part-time. They're making calls right after meetings to their advisor and saying, short Amazon.

It's fucking crazy, man. But, you know, I have the resume of somebody who was arrested, indicted, arrested, went to trial, went to prison, met with a lot of people who were in prison. Right. And if people like me don't speak up, who will? Right. And I understand that me speaking up is not going to come without any risks but I think I firmly believe not think

that I should speak up and as I've told you all proceeds from the book and some of my own money will go into beginning a discussion about criminal justice reform. And it's so bad that recently in New York, about 21 law professors called out three prosecutors because several cases they had worked on were overturned for lack of giving DNA evidence. And the New York City and state pushed back and threatened to a legal lawsuit on these professors.

That's how bad it is. To deter people in the future from questioning. Correct. Have you ever heard of the Ross Ulbricht case? No, I haven't. You ever hear of the Silk Road one? Not the one, not the traditional one, the one online, the illegal drugs website? Yeah, a little bit, but not in any depth.

Okay. I don't want to litigate the entire thing right now and go deep into it but essentially this guy ross olbrich he was a radical libertarian he invented this website where people could go online they could sell drugs definitely violated all international law and everything no questions asked and when i talk about him i'll always tell people even if i understand some of the place he was coming from and i think in his mind he had some good intent, we are a nation and hopefully a world of laws and you can't just run around openly breaking laws and not have some sort of retribution for that. So when he got caught, yeah, it was the kind of thing he had to go to prison. But his trial, which was also run by our friend Preet Bharara in Southern District of New York. He was another guy who went to trial another thing you can relate to

that they had already litigated in the public and had no evidence for and was found guilty and was given a double life sentence no parole it was a political case and that is insane and i will always the guys already served like eight nine years or something he should be out for what he did the the the level of the crime but the craziest thing about all of it is that even though i will stipulate and always say like yes if we're looking at it on the facts yeah he had to go to jail he was he was a criminal in this case his trial never should have happened because and this is the short way of putting it but in the context of his investigation, the FBI,

the team that was investigating him, and everyone was in on this, the FBI. There are very few things that you can be certain of in life. But you can always be sure the sun will rise each morning. You can bet your bottom dollar that you'll always need air to breathe and water to drink. And, of course, you can rest assured that with Public Mobile's 5G subscription phone plans, you'll pay the same thing every month. With all of the mysteries that life has to offer, a few certainties can really go a long way. Subscribe today for the peace of mind you've been searching for. Public Mobile, different is calling. Between client meetings, managing your

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Ready to see why Kinsta is trusted by thousands of businesses? Get your first month free at Kinsta.com. That's K-I-N-S-T-A dot com. Kinsta. Simply better hosting. It was the DEA. They had an IRS agent on it who was actually critical to the investigation. But there was a server that this website operated through that Ross had set up. And early on after the case was brought public and they got him, people started to ask questions about how the FBI got in there and how legal it was.

And so the FBI after a while and the government, therefore, the lawyers were forced to give an answer. And you can go read about it. But once they gave the explanation, it had to do with like a CAPTCHA, which is like that robot thing, which it was the most ridiculous bullshit answer of all time and if you ask any software expert in the world with even a slight degree of understanding on how these servers work they will all tell you this is impossible they had to get in there illegally and that was never brought out the case went to trial and we have the result it was a political hit job and and now you know i don't know if he'll ever see the light of day. People are fighting for it, but it was clearly some sort of like – when they say like deep state shit, that's what this was. prosecutor same everything one of the things that i was very much not aware of when the case went on that actually was reported a little bit i'll give them this they reported this because it was before

the trial is that you had a severe issue with the fbi's i guess reasoning and logic behind how they got the wiretap warrant so something I don't think we've said this directly but it's been insinuated today that is worth noting is that you were the first white collar case ever where the federal government wiretapped your phone they they had your cell phone and then through you they were able to get it for a bunch of other people as well, tapped. So they can listen to all these calls and therefore use them at trial. And when you're tapping thousands and thousands and thousands of hours of phone calls, that's so much discovery for a defense team to go through, number one. And number two, you can make that look however you want in court. So let me comment on this, right?

Yes. I am not opposed to the FBI wiretapping if they suspect criminal behavior. What I am against is the FBI lying to get a wiretap. To get a wiretap, you need to show probable cause and necessity. Agent Kang lied so much that Judge Hallwell, in my case, said that the sworn affidavit of the FBI showed a reckless disregard for the truth. Can I read the full statement? I wrote this ahead of time, so i want to make sure we had it he's he gave that statement where he said this showed a reckless disregard for the truth which is translated to a lie but then he also said on the record false and misleading statements and omissions pervaded the affidavit so extensively that it was and i'm reading to the

side people so bear with me that it was impossible for the authorizing judge to have made the constitutionally and statutory required determination for the issuance of wiretaps. So to follow up that statement he made about there being a reckless abandon for the truth, you then say, okay, so you got to throw him out correct he says he basically says here i'm translating uh you know what we're going to rewrite it because we want to make this case and we think there was a lot of information there so even if they did it wrong if they had done it right we're going to decide that this judge this other person would have approved it correct that's insane but it's the same judge that said, if you call your mother and tell her you're coming for dinner, it could sound criminal in a court setting. So here's the finale to the judge. Soon after my case, he left the bench and started his own firm as an expert of insider trading when he did one case on insider trading. So you can connect the dots. A judge, I know it's sacrosanct in this country not to talk about judges, but I'm telling you the truth.

The judge did say, as you read out, this is full of lies. It shouldn't be. The judge at that time wouldn't have had right information but didn't suppress it. So he's already decided without hearing the evidence, because this was at the Frank's hearing, that I was guilty and I should be tried. And this is like October 2010, six months before your trial, correct? Yeah, called the Frank's hearing. Where they were deciding whether or not the wiretaps would be admissible. Admissible. Got it. So here are the facts up to that point, right? You had two cooperating witnesses, one Rumi Khan, who was he made it all up because he got caught doing it. Ali Farr.

They talked to 24 Galleon employees, had no evidence. They should have dropped the case. So just so people are following, all these things you just listed off are parts of what went into that application into that wire the initial time where they went to a judge because in order to get a wiretap you have to go to a federal judge and say here's our evidence you fill out this it's part of a title 3 law from 1968 that answers all these different subsets of questions as to why you must use this so the idea of a wiretap and i appreciate you saying that you understand the need for it because when you're looking at things like organized crime where there's no papers no

records nothing like that they're literally these guys don't they don't talk about stuff they talk about their mom's pasta and things like that you need a wiretap to ever make a case that's where it becomes last resort so you can make a profile that yes, we don't see how we're ever going to get a paper trail if we subpoenaed anything. We don't see how they're ever going to cooperate and be interviewed by us, agree to be interviewed, when you had on the record a full SEC videotaped deposition for – I believe it was like a full day. From 2007 from a separate investigation that wasn't into your firm. was into another firm so that that's disproven they didn't mention that on the application and then to your point the witnesses that they used to get it were the ones they didn't end up using in court because the ali far guy said he made it all up and rumi khan will get to her but she was in my opinion she's one of the least credible people you could ever imagine putting in any case as a cooperating witness.

But not bad enough to go in front of the grand jury on their behalf. Yeah. And that was another thing. to try to get a guilty plea from me and help them go after bigger fish in the hedge fund industry. The sheriff of Wall Street did not go after any of the banks that perpetrated the case. And when he's asked about it, very few people ask about it, but when he's asked about it, he's sort of sheepish

and pivots the conversation to insider trading. Yeah, it's fair to say he didn't have much of an interest in the actual details. As we've said a million times today, he wanted to look at the headlines. And you were, I think I said this, but you were the easy blood in the streets target. And it wasn't just you. There were I guess like 80 others eventually who certainly fit that bill and going after insider trading cases. in my opinion you can put up a ton of smoke a ton of smoke all over the place and just make it complicated enough that people will believe something wrong happened and there's something

to be said about not going after the people who perpetrated the crisis i am surprised that he at least answers that question these days it's the kind of thing i would expect him not to even answer and that he's at least somewhat honest which is that yeah you know insider trading is certainly not on the same level and there's something to be said for the fact i mean i'm paraphrasing here but there's something to be said for the fact that the guys who created the derivatives in some cases like none of them got prosecuted and and maybe it is a little bit of hindsight guilt on that which i think is i mean good if he feels that feels that because that's really who he should have gone after. But Preet will keep coming up.

There's different things that happen along here where he's woven into the story. Something that I want to make sure we start going one by one on that puts a little bit of a human element into this and the whole criminal justice, I guess like scenario here is the actual witnesses. So people have heard us mention recently, the names Rumi Khan and Ali Farr, because they were the ones who they based the initial investigation off of. They, they're the reason Rumi in particular is the reason they got the wire taps.

And then when they went, as you said, when they went to the grand jury, they used, I guess it was her testimony, and did they also have Ali's in there? I think so, but as you know, grand jury testimony is a secret. They don't release it. Right. So we know, based on what they told you, that she was in there. He could have been in there as well. Either way. But what I do know is his lawyers wrote to our lawyers and the prosecutors about a month before the trial and said Ali made it all up. So we ded have been as well. Either way, the people they used in there, like, for example, like Danielle Chiesi or something like that, she was arrested the same day you were. She wasn't a part of any grand jury. Same with Anil Kumar, it turned out, completely not credible. And Rumi Khan is a very, very interesting one where if they want to paint character without having her get on the stand, they can put up one of those big smoke screens in my opinion.

That was the one chapter of your book that I read a couple times because I was like, okay, let's try to pick this apart a little bit. And I think the way you built the case was pretty good. But to start off, can you just describe to people who she was, when you knew her? You insinuated some of this earlier, but just like a full timeline of her involvement with you and Galleon? Yeah, I think she called me in 1996, cold call,

and said she was at Intel. And she left a message, so I called her back. And she said she was doing some marketing analysis for Intel, competitive analysis, and she was contacting a few Wall Street analysts to get their feeling about Intel, its competitive position. And you mean Intel, the company? Intel, the company. The tech company. The tech company.

And they were competing with companies like Advanced Micro Devices, AMD. And so this happened several times a year in my career. People call and ask me what Wall Street thinks. And so I answered her call and we chatted. And it was fairly innocent at that point. A few months later, she called me and said that she was unhappy at Intel and she wanted to work on Wall Street as an analyst, as a sell-side analyst. She had a background in finance and semiconductors, and she wanted to live on the West Coast. So she wanted to write the reports, the research reports. Research reports, do the analysis.

And so I put her in touch with some people that I knew at sell-side firms on the West Coast. She didn't get a job, and we had a West Coast office at that time, and finally she asked me can she work as an analyst, a buy-side analyst at our West Coast office. So the head of our West Coast office interviewed her and thought that her background was good. She was an MBA from UC Berkeley. She had done an undergraduate degree

at Columbia and seemed to know the technology sector. So we hired her as an analyst. But early on, I found out that she didn't have the rigor, but she was never trained as an analyst. But early on, I found out that she didn't have the rigor, but she was never trained as an analyst. Yeah, she came from a totally different industry. And she was spending too much time on the phone chit-chatting with people. And so when I visited the West Coast several months after she was hired.

I saw that she was really not doing the rigorous analysis. And there was a bus in the West Coast office that she was making all this money trading her own account. How did people find that? Did she, like, talk about it? No, she lived large. You know, she bought a Ferrari. She went and parked it next to the head of our West Coast office's parking slot. And she was bragging about all the money she was making. And so I said, Rumi, you signed a thing that you can't trade your own account when you came to Galleon.

And I hear that you're trading. Is it true? She said, yeah, I'm making $20, $30 million. And I just didn you're trading. Is it true? She said, yeah, I'm making $20, $30 million. And I just didn't believe it. But she said, so I said, listen, I'll have to let you go. So she was there about nine months. Why did you have that? I'm just curious so people know out there. Why is it important at a hedge fund for you to have a rule that your own

people don't trade their own money on their own? Because it creates a conflict of interest. If you want money in the market, you put your money as an investor in galleon so that your money behaves the same way as your investor's money. So there's no thinking of, oh, this is great information. Let me buy this stock and Charles Schwab in my account and then put it in the fund. And it creates the wrong incentive. We were all on the same team. If the investors made money, we made money. So I encourage them to put the money in the galleon funds. And for people, I'm just curious, minor detail, but for people who elected not to do that, is it the kind of situation where you made them

put up a Chinese wall with their advisor? I forget what that sheet's called, but like where they sign a sheet that says, I don't know what investments go in my account or whatever? Correct. So you put it in a non-discretionary account where you don't have discretion over what the advisor is trading. Got it.

Okay. Or you can buy a mutual fund like Vanguard or Fidelity and have them manage your money for you. Yes. So we let her go. And this is what, like 99, 98, something like that? Yeah, around that time, 99. And then I didn't hear from her for five years.

And she called me five years later and said she had lost all her money and her house was going to be repossessed and whether she could call me once in a while to pick my brains on the market, which, you know, I chat with several people on an ongoing basis. But I didn't know that during that five-year period, she'd been convicted of insider trading at Intel when she was at Intel. As a person, quote unquote, giving information out. No, as a person trading on inside Intel information in her own account.

Oh, I didn't know. So it was with her own money she was trading on that company? Correct. While she was there. Oh, my God. And Intel has a policy that any trades you do on Intel, you have to notify the general counsel. So I didn't know that.

And then five years later, she called me saying she was broke. And so I said, sure. And then she said she was looking for a job. And I asked him. I didn't know anything about her for five years. And I asked her, what companies does she have an edge on? Edge in Wall Street is which companies do you know really well, right? And it's interesting.

So she gave me a bunch of companies, and the prosecutor said, I was asking her, what company does she have inside information on? Now, in that five years, Rumi was trading from her own house, one man, a one person outfit. She also, during that period, wrote five cover letters to other fund managers saying she had the edge on these companies. So it was a commonly used term. If you notice, the prosecutors put that word out in the media early on, but they never brought it up in court again because they realized that this is a common terminology. They didn't use the word edge in court.

Ever in court. I'm actually curious as to why, because again, the jury sitting there, they're not on Wall Street. And I will say that that that word which i think has been eliminated by a lot of people on wall street at this point for obvious reasons it does it has a poor signifier to it like when you hear the word edge and i i heard that term sparingly when i worked on wall street it was obviously mostly dead by the time i got there but like when you you hear it, it's just like, oh, you have an edge. It's like you know something no one else doesn't.

So when you're litigating that in the media or to a jury who doesn't sit in there every day, it surprises me they didn't still try to use it because it sounds bad. Just like when they take wiretaps out of context. It sounds bad. Let me ask you. Let me tell you this. In these morning meetings, analysts might present an idea to me. And I would say, what's your edge here? What is the variant view that you have that's not readily available if I read a research report from Merrill Lynch. Why are you different?

What's your variant view? And they might say, my edge is I know that this company's main suppliers are in Vietnam, and there was a strike in Vietnam for the past two months. And I know they're going to have difficulty getting products out of Vietnam. Meaning that would be information that you could find out. A strike is not a private thing behind closed doors. It's open. But it's small enough and a far enough away place in that example that they have researched and found out about it. Done the research. And other people have.

Yeah, exactly. So what we drive for at Galleon was what is a variant view that I can't get from just reading typical sell-side notes. And if we have a variant view and we are right, we make money. If we have a variant view and we are wrong, we lose a lot of money. Yes. I mean, have you ever seen the show Billions? No. I've heard about it, and I've just resisted the whole hedge fund being pursued by a prosecutor because, you know, the hedge fund managers that I know, at least till 2009, were generally very quiet people.

They didn't get on TV. They didn't, you know. That changed. That changed quickly. So, but, you know, they were not flashy people. It's a fairly small industry. I, you know, we had maybe 180, 200 employees as opposed to J.P. Morgan that might have, I don't know, 500,000 employees. So going after an industry like a hedge fund industry was an easier route to go than fighting J.P. Morgan. What Preet did do, Mr. Bharara, Preet Bharara did,

was he fined all these companies. He intimidated them into, but nobody was criminally charged. You're talking about like the big places. The Goldman Sachs, the HSBC, the big places yeah the goldman sachs the hsbc the ubs the morgan sandley's though he did get like he got lloyd blank fine goldman ceo to to testify at your trial and other trials and the connotation there and this isn't proven but i think it's reasonable to take this away lloyd blank fine ceo one of the biggest banks went through the crisis. No one was charged at the bank.

He does what they tell him to do. They make the case. They get the headline. Boom, Lloyd, we're not coming after you, at least criminally. Maybe not people at your company even. So he's incentivized to have to do that. And where I'll defend him is that it seems like, according to your legal team as well, they thought he was a solid witness. He wasn't somebody who was totally in the tank for the prosecution. I don't know if that's reasonable to say.

I mean, he gave a fair testimony, but he didn't realize it was the headlines that Preet was, half the people don't read the trial transcripts and all of that. Or Blind Flying testifies on behalf of government against Raj. In fact, he came and shook my hands on his way out, and that became a big deal in the media. No, some of it's obvious at first glance, but only if you're actively paying attention and actively trying to read between the lines, which frankly most people who read the news, myself included, depending on what it is, we got lives. We got stuff to go about. Not everyone does a podcast where we talk to people about everything.

It's like kind of my job to know some stuff whereas you know you gotta earn a living you got a family and you got the same 18 hours that you don't sleep in the day to get it all done it's like you have deadlines to meet for the next morning's newspaper that's yeah it'd be yeah in the media you do and it's i don't know it's it's kind of nuts to me that that it is such a narrative driven thing but it did become that but i i don't want to get off roomie just just to go back to her so you had been explaining that she came to you five years later with a sob story let's call it and so you had fired her not for insider trading but you had fired her for doing lack of skills and also lack of ethics on that one thing trading in her account yeah okay

so she comes back she calls you up she claims to have this edge in the company which for people out there watching billions the way they paint this in that show is like it's all like dramatic and then someone stands up at their desk and looks at axelrod and they go i have an edge and then it does like a flashback to them meeting some guy in a back parking lot, handing him a manila envelope and getting information, which is not what it's meant. But here's the deal, right?

If I was dirty, I would have hired her. If I wanted a quote-unquote the bad edge, right, I would have hired her. I didn't hire her. Did you pay her? No, not a penny. And that's part of the reason I didn't hire her. Did you pay her? No, not a penny. And that's part of the reason they didn't use her in court, because there's no paper trail.

There's no incentive. But here's another angle that people didn't pick up on. She worked for a company called Trivium that traded in the same stocks, Polycom, Hilton, as a consultant. And Trivium's head of Trivium was not charged criminally. The SEC charged he paid a fine, civil fine. What was Trivium again? It was a hedge fund.

It was a hedge fund, okay. And I'm piecing this together because you alluded to this earlier, but just to bring it back full circle, you haven't said exactly what happened. In the meantime, she was found guilty for the intel thing, which you mentioned, but it was kept private? Yeah, they kept it. I don't understand. They kept it under seal and they misspelled her name instead of K-H-A-N. It was K-A-H-N. No trail. And they signed that she would be a witness for the government anytime. anytime so she goes point being she's able to go get a job at a place like it was trivia right trivium so she's able to get a job there because they do a background check like anyone else and nothing shows up even though she's a she is at this point for people at home keeping score she's a convicted felon in 2004 convicted felon for insider trading or inside literally that's like

a lifetime ban type deal once that happens through FINRA and the SEC and everything. So she's able to then get this job. The government obviously lets her walk in there and do it. And the idea immediately is now tainted, if you look at it from the outside, from a biased perspective, as the government saying, all right, let's see if a case pops up. So she calls you. Well, she got caught for insider trading for the second time right right right on hilton and a few other chronos which i had never heard of but this is after just to be clear keep the timeline straight this was she started calling you in 2004 and then they they

popped her the fbi gave her a visit in maybe like 06, 07, something like that? Well, she called me after. Yeah, you're right. Got it. Okay. I didn't know what she was doing during that period. But she was working at Trivium as a consultant. So she didn't ask you for a job either technically or did she? Well, she was.

And I said no. And then she went and joined Trivium. Got it. Okay. Now, she was calling me to pump me for information of what I was thinking, what I thought of this talk. And after a while, I found it just annoying. So she says in a deposition to the FBI

that she had to hit star 69 to hide her number, and she would call me after 6 o'clock when my admin left so that I would pick it up directly. And there's this interesting exchange between me and my admin. She says, it's Rumi on the phone, And I say, tell her that I'm dead. And the admin says, well, I'd rather say you're in a meeting. But here's the point of that. If she was such a wealth of inside information, and remember, there was not one single recorded call of her and I talking any stocks.

Oh, because she called you on the office line. Correct. And that was not bugged. It was your cell phone. But she also texted me, right? Right, the instant message, the internal instant message. Yeah, internal message. Yeah.

And so if she was this wealth of inside information and I was a cheat, I would be sending roses every month to her. I'm trying to remember this just because there was – I got the book right here. You have, if I remember correctly, you have like a list of the instant messages. Right. On one of the stocks. She's trying to get me and I'm not responding. Yeah.

Polycom. Polycom, right. So here's a good spot to – I'll find that later. But here's a good spot to put that in. The government charged you – do you remember the full list of stocks that they were accusing you of and what specifically the companies were? Yes. Can you just list those off quickly? So there were eight stocks.

Got it. When I didn't plead guilty, they increased it to eight stocks. Got it. When I didn't plead guilty, they increased it to 34 stocks. And then they dropped the 34 stocks because they just used that as a nuisance factor for us to defend all those 35 stocks. So the stocks were AMD, Polycom, Hilton, Google, ATYT, and Akamai. But what they did was if I traded Akamai on a Monday and a Tuesday, they used this as two charges rather than consolidate into one.

Right. And if I'm just to make sure I follow, these were all in the 14 final charges that were at trial once you were fully on trial. Those all eight stocks appeared that you just said. So the eight stocks and then the – so of the 14 counts, five of them were conspiracy counts. So for example, I was in a conspiracy with Rumi Khan to trade Polycom. I was in a conspiracy with somebody else. So you had conspiracy counts, but the substantive counts were eight. but one of the interesting parts about the case you lay out because in in your book you go through it stock by stock too but they were accusing you and i'm paraphrasing here there's more details but they were accusing you of trades on a certain date when you had already built positions up

in millions yeah in polycon so you were without inside information that they were accusing you of already had enormous stakes in them and then they were trying to without any wiretaps or anything or knowing what what you said to each other and again this is why they didn't put this in trial because it makes no sense they didn't put roomie con in trial but there is a list of all the saved internal messages of her just dming you like i mean this is the kind of stuff you see like when when you start ghosting a girl and she just starts coming after you for months and months on end talking on one side and you take a screenshot and send it to your buddies not that i do that but you know it's like hi hi you there hi you there hi what's up hi microchip raj you the best on intel hi hi call you these are

all over like 25 days and you the contact says you never answered. Yeah. And you never saw him. No, I saw him. But I just thought she was a pest at that time. So she – they make this case and did she get mentioned to you? Because you don't know officially like the whole grand jury, but you can deduce she was a part of it. Did she get listed as someone who was – I don't remember how this works because i'm not a

lawyer but she was going to be called at trial but then they just never did they called a cc1 cooperating um something one cooperating witness cw i don't know got it and she was listed as one of their trial uh witnesses they might call and so they didn't't know. And she was listed as one of their trial witnesses they might call. And so they didn't end up calling her. She was also the only of the quote unquote key witnesses who had at least agreed behind the scenes and then in some cases didn't end up testifying, but the government had to honor quote unquote their agreement. She's the only one who went to jail for any time. Yeah, because the way it works is if you're a cooperating witness and you are helpful in building the government's case, the government writes a letter to the judge saying that she

was very helpful and recommend a reduced sentence. And the judge said that her lies were so outrageous that she had to give her a sentence. And the government can't really fight that because it was her second time to the rodeo and nothing changed. Because when they came to that agreement with her in 2001, it's like, yeah, we can tap on you whenever we want. But they caught her actually committing crimes again. It wasn't like it was based off the old one. Yeah. So here's what I say.

Pull that mic in just a little bit. Here's what I'd like to say there. The lawyers that I've spoken who worked in the Second Circuit said that in itself would disqualify her as a potential witness. And so, once again, the prosecutors bent the rules to try to go after what was a high-profile case. And she also was the basis, this you know, because I believe they have to release these documents and it was part of your appeal, but she was the main basis of getting the wiretap in the first place, them catching her on her crime. Here's what happened. In California, you can wiretap a person without the other person knowing that that's a law. So the FBI got her to call me and ask for my thoughts on three stocks.

It was Intel, Broadcom, and Xilinx, three semiconductor stocks, because my background was that of a semiconductor analyst. So I told her I was no longer covering the semiconductor sector, because we had analysts doing that. I was more of a portfolio manager now. And so I told her what my analyst thoughts were. You know, I think they're going to do well, not do well. They said that I had inside information on these three stocks.

Okay. Now, the icing on the cake here is that I didn't have a single position in any of these three stocks at that point. So how can you say I had inside information I was trading on inside? If you weren't actively trading it. If I didn't own a single share of these three stocks. And those were the types of that FBI agent Kang put in his affidavit. And again, just for people at home keeping track of it, that was the thing we talked about earlier where they have to fill out the Title III application

and they have to – there's like several different angles they have to look at it. But another thing I saw in there, like we talk about context and you mentioned that the judge had said after your case, if you play wiretaps and someone talking about going to their mom's for pasta or something, it sounds, they sound guilty, right? In a courtroom. Yeah. I forget what the sentence said, but you and Rumi on her recorded call had been going back and forth and you said the way they quoted it was it it so you said i think such and such company people listen to this this is crazy i think such and such company is going to go up and then probably their their their guidance i think it was is going to be down in two months and they just wrote it as they're going to be up i know it's insane yeah i mean, they took snippets of wiretaps out of context and misled the judge. Now, if you and I lied in a sworn affidavit to the court, we'd be going to jail. It's perjury. But the judge, Judge Hallwell, gave Agent Kang a free pass on this yeah and he had to kang testified at that hearing right at the

franks here yes because he had to try to say and he admonished him publicly and then said no we'll keep the evidence though you have to keep it and like there was a thing filed i might pronounce this wrong because again i'm not a lawyer but it's called an amicus brief is that right yeah yeah so this blew my mind because little fun fact about me when i was growing up i loved studying the mafia like prosecutions and stuff so i used to follow how they did all this rico stuff and then i met a guy jules bonavolanta who was one of the key fbi agents taking down the five families using rico and everything. And it was just wild to hear how this all went down. But there's one guy who, I don't know if he's retired now, but for years, he's been a professor at one of the Ivy leagues, maybe it's Yale or Columbia, but he is a legend

because he created the Rico statute. And that is G. Robert Blakely, legal expert, whole nine. Short end of it is that Rico is the law that that it's called like racketeering and something conspiracy whatever but it is the law that was invented to allow the government to be able to build a case against the mafia who has no paper trail no nothing and specifically the guy who made that g robert Robert Blakely, had to be an expert on Title III wiretapping from 1968. He wrote one of the chief architects of Statute III. I didn't even know that. That adds to the case.

And he wrote an amicus brief on my behalf saying that that this is term Title III on its head. And every American should be aware, because if the FBI agent can lie on a sworn affidavit, they can say, I want to wiretap Julian, and they lie, get a wiretap, and any American can be wiretapped. It's a gross violation of our privacy and rights. And I didn't watch it because you and I were talking.

I go out of my way. I broke this rule one time. I'm never going to break it again. I go out of my way to not listen to interviews or podcasts of someone who's going to come on here that's been on something else. But when we're done, I'm definitely going to listen to the one you did with Glenn Greenwald. And I bring him up because he's the guy who made the whole Snowden case and brought that out. And it's a different issue, but it's not because Snowden's whole point was your constitutional rights are being shit on every day inside the government buildings and someone's got to say something about it because okay they're going after a terrorist today bad guy we could all agree but they're doing it not following the

legal ways such that one day they could just go after some guy on the street if you give them the power to do it. And this is why I say silence is not an option. For me, it was not an option not to write this book. What's scary is that, and this is another point to add to your case with speaking up. Frankly, if they can railroad you, as it appears has happened at least on many levels of this trial in my opinion if they can do that they can do it to anyone because you had you had the financial war chest you could spend them till the day you died and with whatever legal recourses you wanted anybody who could the case, you had every possible resource that a private citizen could have minus – and I say this nicely – a little bit of naivete of how the system works against the people sometimes. Outside of that, you had every resource available and they got you.

So for you to come out, you're pointing at anyone else who could find themselves in this position and say, yeah, good luck. And this happened to Danielle Chiesi, for example. She ran out of funds, right? Like, good luck fighting the government because they'll just spend you into your sleep. But, you know, she stood up as far as she could. She could have testified against me. Can you tell people who she is? Let's go to her. Danielle Kiersey was, when I got to know her,

was a portfolio manager slash analyst at a billion-dollar hedge fund called Newcastle, which was an arm of Bear Stearns. She lost almost all of the money because she had shares in Bear Stearns when Bear Stearns went under. But she was very outspoken and colorful person. I read later on that she won some beauty contest Miss New York or Miss Connecticut. I think so, yes. I don't know, but anyway. What was her line again?

She was like, I like sports, stocks, and sex or something. And not necessarily in that order. That was the first time I met her with my analyst. Now you could see how they could use that and say, these are the people he's associating with. You could paint a picture with that, but she was like that. Yeah, the way we met was my semiconductor analyst and her. She met at a conference.

And she said, I'd really like to meet Raj and get to know him. And so my analyst came and said, do you know this Daniel Kiese? And I said, no. And she said, everybody knows Daniel. Because I had stopped going to conferences at that time and doing analysis. This is what, like 06, 05, something like that? Yeah, 04, 05, 06. And so I met her with my analyst.

And I said, hi. And she said, I'm Daniel Kiersey. And I like everything that starts with S. I said, OK. And so she said, stocks, sports, and sex. And I'm like, damn. I'm not used to somebody coming out like that. So she was arrested the same day I was.

So she had been bragging on wiretaps that she knew the CEO of AMD, a stock that she was charged with. And they'd gone that morning to her apartment and said, I want you to call the CEO of AMD and have a conversation with him because we want to get him as well. High-profile guy. And this is October 16, 2009, when she was arrested, same day as you. And that we would, you know, let you go or cut a deal with you. She refused, and she fought it. Wow.

And there were a lot of wiretaps of colorful language on her wiretaps. And so I guess she fought till the wiretaps were either going to be suppressed or not, because they really didn't have anything on her. But when the wiretaps were not suppressed, she said, I'm a dead duck with, you know, all this colorful language. And there's one that she tells her doorman, you know, by AMD, this baby is going up, you know, and, you know,

da, da, da, and shh. That was on the tapes. On the tapes. Yeah. And don't tell anybody because I'll end up like Martha Stewart. You know, I mean, she was just talking a lot of creative stuff. But you could see in her case, not to put her in the ground here, but if you're a jury looking at that, look, if she didn't do it that sucks because the way that she talked about it was careless to say the least she was one and i respect the fact that she she didn't give in to

anything and she then took her time like she went to jail for 30 months and she was like kind of funny about it too she was like joking with the prosecution in court like she was kind of a savage so i respected that part of it but like i could see how listen you didn't do yourself any favors with the way you conducted yourself you weren't thinking about well lady on wall street talking like this acting like this saying whatever the fuck to people on the phone this could look a certain way and so it that did bite her in the ass yeah but you know she didn didn't She was a gangster You know, in the sense that she stood up And she didn't do insider trading

And she didn't have access to the CEO of AMD There's a lot of puffing on Wall Street To, you know, show that you're a player And she went to jail And came out. And, you know, I read, I saw a video clip where she says, before she was sentenced and before she went to prison, that she had time to do a boob job.

And so I don't, I mean, I just found her to be just a very colorful character. I think the prosecution did too. It sounds like it. Yeah. I didn't have access to all the wiretaps. But the ones I did have were just very colorful. Yeah. And so they painted – like there were two other guys.

The guy Bob Moffitt who was going to be possibly the CEO, I think, of IBM. IBM. Yeah. And then I guess the guy she worked for at that firm, what was it called again? Newcastle. Newcastle. You're talking about Mark Curland. Yes.

The portfolio manager. Those two guys went down, not because of her testimony because she didn't testify, but they went down. One is a quote-unquote insider feeding information. Another guy they went after where they didn't go after those people in your case and then her boss went down because i it sounded to me like the connotation was that he had gotten inside information from her and knew it and so then when they made these cases and these agree these plea agreements happened what did they do they said the gall Galleon case, Kiese, and yet it had nothing to do with you. I hadn't met Bob Moffitt. I didn't know Kiese's boss, Mark Keller. And I had met Kiese a couple

times, you know, when late, I mean, in 2007 or 2006 or something like that. Got it. So the people, she didn't testify, obviously. Rumi Khan didn't testify. Ali Far, who we talked about earlier, who recanted everything in a letter to your attorneys and to the prosecution two months before your trial. So I guess that was like February or January 2011, he said it was all fake. Correct. 2011 he said it was all fake okay and by the way he was maybe it wasn't him maybe it was another guy but you talk about like entrapment on the phone i read that he made like 145 calls or something or 200 calls or some crazy number like that where the fbi was on the other side trying to get you to incriminate yourself over, I don't know, a six-month period, and never once did they get anything.

Yeah, I don't know that many calls, but he made a total of that many calls to all the Galleon employees. But to me, he was trying, and there was nothing that I said that I was just like, you know, okay, thank you, and put it down. Nor did I trade based on his information. I mean, my investment positions were based 100% on the written reports of my analyst. There was nothing inconsistent where my analyst said, buy this stock, and I'm getting a tip, and I'm selling it. And these were written reports. They were kept at a server outside Galleon where we couldn't go retroactively and mess it up.

And so this was our DNA. This was our analysis, was our DNA that I thought would exonerate me. I thought it was a simple case. I had existing large positions on each of these stocks before this chit-chat that they recorded, and there weren't any passing of inside information. It was just chat. For example, Anil Kumar called me and said, eBay is going to have a 10% layoff.

This one offended my soul, reading this. It was in the newspapers that morning. And all I said was, yes, yes. And I ran to my morning meeting. It was the public domain. He could have well read it in the newspaper that morning and called me just to chat. And I think if I remember correctly, because there were a couple guys around this, I know Gupta will get to him. He may have said something too.

So I may be remembering one of them backwards. But either way, that conversation with one of them that they were trying to use the prosecution it was discussed in a public story two months before whenever that conversation was yes so it was like wait a second so when when you're sitting there that one i feel like the jury probably had to be like okay all right that that makes sense that's so easy it's like it offends your conscience but kumar is a guy i keep saying we're going to get to some people and we have like we got we we got through roomy khan i just want to keep this as easy for the narrative to tie together as possible. What I want to do is move to some of the people who actually did speak at the trial though, and Kumar is a big one. to me that and we may have said this but that that you could definitely be guilty of it's some

naivete on what the legal system is willing to do and what they're willing to do to make a case and so when you look at the guy adam smith who was your employee who testified against you at trial and i want you to go through exactly how that all came to be because that was wild. But there was something that happened right after you were arrested where you asked everyone at the firm to turn in their laptops. Is that right? Correct. Okay. And I installed a lot of – I took all the shutters out. Of the office.

Out of the office. Now, if I was guilty, that's something that I wouldn't do, right? I would figure. Of the office. And at the time, I think you said you didn't think anything of it. You didn't see a reason why his excuse wasn't real. I read that and I went, okay, that's definitely a little bit naive. That would have sent up my bars. I know you weren't thinking like that because you thought you knew this guy and everything, but when that happens, you've got to assume that every little thing they could possibly use against you, they would. And so I would have been concerned about that, and you weren't. But after that, over the next year I guess it sounds like because your trial was a year and a half after you got arrested. Over the next year, your legal team and you met with Adam Smith on two occasions. And his lawyer. And his lawyer. And his lawyer. And at these meetings, what did he tell you guys?

That he didn't see any signs of inside information exchanged, nor did he give me any information, that I was his mentor and idol. And he did this voluntarily. He wanted to come. In fact, after my arrest and we were gathering information from our records to give to our defense lawyers, Adam was one of a team that helped gather information. Now, I don't know about you, but I've lost a couple of laptops in my life,

leaving it on a taxi or leaving it on the plane I mean maybe a couple is exaggeration but at least one and so when he said he lost his laptop he was one of 150 60 people I just assumed because he used to go a lot to Taiwan and I assume he had lost it there. I didn't have a direct conversation with him because our chief operating officer went and gathered it and said, Adams has lost what everybody else we got, and I said, good. And Adams was proactively helping me defend my case. As a potential witness for you. As a potential witness for me.

And proactively sought out my defense lawyers at Akin Gum and went and said that he saw nothing and did no insider trading at Galleon. And then what changed?

Well, when Galleon shut shut down he started his own fund now tell people just not to cut you off but you this was interesting to me you shut down galleon like within a week of being arrested right seven billion dollar fund correct and when you wound it down you know this is all in the news and everything the money's locked up for a minute and like nothing's moving. No one, you didn't have anyone sue you? No, because we gave them all their money, right? Interesting.

And contrary to what the prosecution was alleging that I was making lots of money. So Adam went and started his own fund. And one of my investors who was, I mean, one of Galleon's investors, provided him the seed capital. And he called me and asked me about Adam. And I said, you know, he's a talented young guy and he'll do well. And so he got a seed fund from an investment firm called Polaris. And the gentleman who ran Polaris was John Purnell. Oh, right. Okay. So the FBI, after several months of talking to Galleon employees, lying to them, I know at least eight people, they went and said, the big guy has given you all up,

which means Raj is cooperating with us and giving you all up. You might as well get on the train and negotiate a reduced sentence because you're going to get really punished when we come after you. Not one of them said there was anything going on. So they had to get somebody because if nobody at Galleon said there was any encouragement to do insider trading or there was insider trading, then their case is significantly weakened.

So they got an informant to call Adam and say, I got information from a very good source at the company. This is what I call real insider information, that a certain company was going to miss their earnings, and Adam shorted the stock based on that information, and the company missed their earnings, and they paid a visit to him. So they got him.

They got him. And that was about in early 2011, just before my case. And he cut a deal with them and said, I'll testify against Raj. Now, when they got him, Adam, in a panic, called John Pennell from Polaris, his anchor investor. Which is the guy that you advised. To invest, he's a good guy, because that's all I knew about Adam. And John met with Adam in New York, and he told him about Kang intimidating him,

and the same story, you won't see your children for 25 years, and so on and so forth. And he had breakfast with Adam, and then he called me and said, Raj, I need to see you as soon as I can. So I went to see him, and he said, this is what happened. So I said, write exactly what Adam told you in a memo to my lawyer, John Dowd, which John Pennell did, saying that Kang wanted him to testify, connect me with a banker at Morgan Stanley

and all sorts of fabrications. So Adam totally reversed his tune when he got arrested. Unfortunately, the judge who allowed all sorts of chit-chat on wiretaps refused to allow John Pennell's note to John Dowd.

Yeah. And again, it's a glimpse into how the game is played if winning at all costs is your mantra so adam gets on the stand and long story short i don't know if you remember exactly which stocks were his because i don't but he gets on there and says, yeah, I gave him information in 05, 06, 07 about stock X, Y, and Z. And I think one of the incriminating things he said was an email or something that he sent to you that he said you ordered him to send. Well, no.

What he said was there was a company called ATYT that we owned, a graphics chips company, and he owned it too. And so he was a portfolio manager by then. And so they had announced their earnings, and the conference call was during a morning meeting at 8.30. So he said, do you mind if I don't come during a morning meeting at 8.30. So he said, do you mind if I don't come to the morning meeting and listen to the call? And we have a rule that if you're an analyst and you listen to a call, you write an email of what you learned. I documented everything. That was my discipline.

So I said, okay, send me an email. And I went into my morning meeting. By the time I came out of the meeting, there was an email from Adam saying that, you know, whatever they said on the conference call, and that

it wasn't that positive. So Adam's narrative on the stand was when my lawyers cross-examined me, they asked him, did he tell you to fabricate an email? He said no. Has he ever told you to fabricate an email? He said no. So why are you saying that he asked you to fabricate an email? He said, no. Has he ever told you to fabricate an email? He said, no. So why are you saying that he asked you to write an email?

Isn't that standard practice? He said, yes. But what he did say was he thought that I wanted an email so I could buy more ATYT to cover my tracks. But the reality is i sold very next trade i did on atyt was selling it i was not buying more which was a wrong trade i should have bought more but based on the information i sold but once again the jury didn't understand the subtleties of all of this and again these i don't know how long each testimony lasted for each guy i

know i was and neil kumar's went i think for days or something right so these are long conversations in front of a jury that has no wall street knowledge which is not their fault and they're they're often especially when you're talking about math and numbers and dates and times it's not like you're sitting there and like and then he stabbed her and they're like oh you know and they're paying attention and they don't have a paper and pencil to do the timelines and all of that stuff oh they don't have that i don't know i didn't see any of them take any notes wow that's interesting but more more case for it it's it's boring it's not entertaining. Like your book, I was not bored in your book, but there would be times where it would be two, three straight pages of going through like dates and stock and I'd have to go read it a couple of times just to be like, okay, then we traded this, then we traded that. It's almost like an accountant talking, but that's what the case is. So now you translate that to someone going through these details over and over and over again with a jury.

It's like, okay, it sounds bad, and then as a defense, you got to make it entertaining. Good luck. So he gets in there. He says this, and that was about one particular stock. I don't know. Were there a couple others too that he was trying to claim similar idea? No one one was the main one that's okay so that was one that was one angle then they had in the guy what's his name goal rajiv cool rajiv cool so who was he to you because this one was a little different because he was someone that you advised on a, I guess, like as a friend basis about like a Schwab account or something.

Yeah. So he was a classmate of mine who left, I mean, went back to India after he graduated, came back and joined Intel in the private equity area. And he didn't know Rumi Khan. He didn't know. Totally different. No overlap. He worked for Intel Capital. And he wanted to invest some money.

And we had a minimum of $500,000, which he didn't have. So I said, listen, open a Charles Schwab account. I'll chat with you about stocks. And, you know, you trade it if you like it. So we were friends. Our families knew each other. And so he looked at companies from a private equity standpoint. I was a public market investor.

So we should talk about situations. No inside information. They claimed that he gave me inside information on Intel. And he had borrowed some money from me because his father had an emergency stay at the hospital and they were going to repossess his house. And he had asked me to send him some money, which I did as a friend. There were two, right? There were two loans. No, one loan was a down payment for his house.

And that was like 04, 05, was like oh four oh five something like that something like that and you have a record of that too and a note from him you have a note from him and you all say i forget there's a term for it that you literally are in possession of it's like a the hell is it called fuck um i don't know what i'm talking about not Not an affidavit, yeah, but a note. Yeah, like a loan note. A loan note, that's it. Then a few years later, he called me and said he was in a panic from India, saying he needed money right away to save his apartment or house in Bombay, and I sent him money for that. But he didn't use it for that.

No. Subsequently, I found out that he was using it to refurbish his kitchen But he didn't use it for that. prosecution tried to show that I was giving him money for inside information. Now, Rajiv was the most truthful of the three cooperating witnesses because when they asked him, was there any quid pro quo, he said no. Oh, he said that on the stand. On the stands. And he said, did you ask him for the money? He said, I don't know whether I asked him or whether he offered. Now, I don't know whether I asked him or whether he offered. Now, I don't send money to people just for the fun of it.

Fuck, I was hoping on that. Okay. So then they asked him, did you refurbish your kitchen and buy a brand new? He said, yes. So he said, you deceived Raj, and he said, yes.

But what he did say was that one occasion, he gave me some information on Intel. And he said he didn't know whether it was good or bad. And he doesn't know, he can't remember what he told me. So how can they say what you traded? Yeah, that's my question So I said 100% this account is going to get thrown out But the prosecutor, in this case Brodsky

Said, oh you heard Rajiv Goel testify He said, I told Raj that Intel was going to have a bad number, and he sold the stock. But they don't. And then at that point, Dowd said, ladies and gentlemen, there's no record of this. So the prosecutor knowingly, and this is not he said, she said, you can go to the court records.

But the jury just, and i was convicted on intel too and here's the thing right he worked at intel for eight years at that point if we were in a conspiracy and according to him one time in eight years he called me and he doesn't know whether it was good or bad doesn't remember anything right now he was trying to save his yeah neck because what he did with that money

part of it is he hid it in a Swiss bank account and my defense lawyers asked him did you have a Swiss bank account illegally he said yes sir why did you have a Swiss bank account illegally? He said, yes, sir. Why did you have a Swiss bank account? He said, because in India, it's seen as a cachet that, you know, I have a Swiss bank account.

Now, I don't have a Swiss bank account. I paid my taxes like all American citizens. You know how they said this in the media, though. What's that? They said this in the media like this was your account. Like they pay in the media as a headline. I'm just – because I reviewed all this stuff. I remember it, but I reviewed all of it. They said like, oh, yeah, among the things Rajaratnam is accused of and was therefore convicted of is that he set up Swiss bank accounts. Well, in that case, they should file tax charges against me, right? Yeah. They charged Rajiv Goel. And if I set up Swiss bank account,

do you think that I would take a large part of that and refurbish a friend's kitchen and buy a BMW for him. It just doesn't add up. For no good information. And so then they asked him, did Raj tell you to set up a Swiss bank account? And he was honest. He said, no, it was my idea because it's a cool thing in India to say,

oh, I have a Swiss bank account. It means that you're a bigger player than you are. So that's the Rajiv Gold story. Okay. Well, let's get to the big one here then. And that was a guy we've brought up a few different times without context, Anil Kumar. So the very curious thing about him, before we get to the details of exactly what he said is that three years after your trial or whatever it was, two years after your trial, he was called to testify at your brother Rangan's trial. Now, your brother was charged with some of the same stocks that you traded in. And to be clear, he didn't own Galleon or anything. He worked for you. But they were charging him for, I guess, like Polycom and a few others.

And the jury, who I believe, once again, no one had any financial background or whatever, they found him not guilty in three hours, which means they went back there. They didn't even start eating the pizza, and they found him not guilty in three hours, which means they went back there. They didn't even start eating the pizza and they found him not guilty of the same things. was – after he was done being star government witness, he was given no jail time and two years probation, and he had gotten the big fish. got their case they got you they got you to prison now they go it's like they're trying to run up the score and they go for your brother and now the guy goes in there and changes up what he says what i don't understand i do understand actually but what should be like a moment is then why wasn't he immediately charged with perjury and i think the common sense example there or logic is that the government is like, okay, well, we got the one we want to just slide him off because we didn't need this case as much. Frankly, Rangan is not nearly as big a case as Raj, and that was the first one. We can't have that one unravel. So to go into exactly what happened at yours, though, I just want to make sure we had that background.

We'll come back to it. But Anil Kumar is somebody that you also went to wharton with as well yes okay but if i understood it correctly you reconnected with him and became good friends with him maybe like 2000 or 2001 like you didn't really talk after college when he went to mckinsey and then he was high up at mckinsey and you guys reconnected yeah he came to see me uh to drum up new business because here was his friend who he had or his college um classmate who had done pretty well and was a potential client. Galleon. Galleon, right. Yeah. Okay. And when he came and pitched the business, I said, listen, I don't need McKinsey to tell me what to do and what not to do. Because I have smarter analysts who know who are doing really good research. I'm not going to pay McKinsey. But then he hit me with another angle, which was he was in charge of the India practice for McKinsey, or one of the senior guys there.

And it was at that time that U.S. companies were using Indian BPO, outsourcing their software development to Indian companies, outsourcing back office. What does BPO stand for again? Business Process Outsourcing. Okay. And there were some interesting companies that were coming public in the U.S. market, like Infosys, Tata Consulting, Satyam, Wipro, a whole bunch of them. And he said, we could do consulting for that. And I said, okay.

That made sense to me because we didn't have an Indian presence. So it's like getting a research analyst kind of. Correct. Got it. And at that time, the American firms were not doing any research on the Indian business process outsourcing companies. Now, quick question, and we'll get to what he said where, frankly, the trades don't line up with what he was giving you. But in the meantime, just for like a cause argument, people from the outside might look at that and say,

well, he's working at McKinsey. It's arguably the most important management consulting company in the world. They have – I mean the presidents of the United States have been their clients, right? So some of these companies he's talking about could be clients that he is – unlike just being a client of the firm, he might be directly involved with some of the actual companies themselves, like himself. So where people might say, well, why would you get into that agreement with him when there could be a conflict of interest that you might not know about? Could you see how that's at least like a logical, like, okay, why did you need to do that? Yes and no, but you know, McKinsey consulted with other hedge funds and other private equity funds. And they never gave us any granular information on earnings.

I don't think they even knew. Like MNPI type stuff. Right. Right. And McKinsey, you know, would consult to Pfizer and Merck and Chirinplow, all in the same industry. And they had, I thought, very strong Chinese walls, different teams working on different things.

Anyway, it was a legitimate, we signed a legitimate, what do you call it, legitimate consulting agreement. And this was the Picos trading thing? Correct. Is that what he called it? Picos, yeah. Whatever. That was the name of his company. His company, yeah.

And it was outside of McKinsey. Yeah. What he told me at that time was that he had a friend who was an expert on business process outsourcing. And he had a company called Picos. And rather than McKinsey Consulting, because I had said no to McKinsey, he came up with this BPO idea that if I could. So we signed a legitimate consulting agreement with Picos. That he and his body co-owned. Co-owned, right. And that he had a group of analysts in India doing this work. I didn't do any research on PCOS. I eliminated that consulting agreement a couple of years later

because the Indian outsourcing industry became big enough that I hired an analyst in New York to follow that. So the timing was I hired him, and a month later I eliminated the PCOS consulting. And I believe from that time period, he gave testimony at trial where he said that maybe it was AMD. So what happened was he had come back to the US in their Silicon Valley office. McKinsey's. McKinsey's Silicon Valley office. And he said that he gave me information on AMD. And you didn't have a position on AMD

at that time? I had a position. No, first he said he gave me positive information on AMD. That's what it was. It was the opposite. And I was short the stock. Yes. So if I got positive information, why would I bet that stock's going down? Yes, that's what it was. So he was contradicting his own testimony. But the jury was not paying enough attention to pick up on that. In the closing arguments, Dowd did mention that several times. Dowd thought, Dowd really, for people that don't know, John Dowd is your main attorney during the trial. He's a pretty historically known trial lawyer out of Washington. He's done some interesting cases.

But he really hammered him. Like he hated Kumar. Yeah, because he was lying. He said that this whole pre-course trading and everything was my idea. And he wanted to invest in Galleon. But he didn't want to pay taxes. That was one of his core skill sets, avoiding taxes, Ahil Kumar. And he used the name of his babysitter or his housekeeper,

who was from India, to invest his own money. And he said it was my idea so that he could cheat on his taxes. Now, I had a housekeeper at that time, and I didn't put her name. You know, any investment I had was in my name. But he said that I came up with that idea, and John Dowd just immediately disliked him because he's full of lies. And that's one of the things he later recanted at your brother's trial. Correct.

Now, at my brother's trial, you pointed out correctly that he was no longer, he had been sentenced. He was no longer under the leash of the prosecutors. And he came clean. In fact, one of the first things he said when my brother's defense lawyers said, why are you here to testify? He said, for peace of mind, sir, I'm a broken man. I've lost my family. I've lost my reputation. I've lost my money. So for peace of mind. now um the government did make some noises about perjury

that he was committing perjury and they're in court they said we're going to charge him with perjury they said that they sort of indicated to the judge because now they're fearful that they've lost they're going to lose my brother's case so me and i have to go check this because i don't know but maybe they didn't say that directly but they at least strongly insinuated that there was a problem yeah with this okay to the judge got to the court right all right i'll check that out check that out and but they didn't pursue it i wonder why the reason is this they'd

my brother got acquitted and you can't try them for the same crime it's the double jeopardy yeah the reason I in my opinion

I don't know for sure that they didn't charge him with perjury would he would tell the court and the public all the coercive tactics that the prosecutors used in my case and open my case up again.

You have nothing to lose either. Yeah. And as part of his cooperating agreement, the prosecutor said, anything that you've done in the past is forgiven. So all the Swiss bank hiding and using his housekeeper and all of that was forgiven. Can we go back to that for one sec? Yeah. This Mandrew Doss thing, his housekeeper.

So there's an article that people should check out online. It was actually pretty solid reporting. It's long, where a reporter tracked her down and went to India and found this woman. Now, I am not well-versed in the Indian caste system and stuff like that. I'm aware of its existence and how certain people are treated and the way it works, but not – if you give me a test on this, I'm not going to do it very well. But the bottom line is that she's towards the bottom of that caste system whereas someone like Anil is towards the quote-unquote top of it even as someone who lives in America now. And he had her over here, as you said, as a housekeeper, babysitter, the whole nine. And while she was here, it's been proven that he paid her $150 a week, which amounted to like, I forget. $5. No, $150 a month.

A month. Which is $5 a day. Yeah. And she was dead scared. This is the reporter, that when she came to America, he would take her passport away. Yep. And, I mean, she worked 24 by 7, was the cook, the housekeeper, whatever. And so, but she was deadly scared of them.

But he used her name to hide money and not pay taxes. And she was barely literate. And he was, and I think he admitted this in in court i think dowd got him to say this he was very good at fraudulently covering this up because this is he has to handle this paperwork on his end to open up the bank accounts he's not opening up a bank account with galleon and then whatever paperwork you get from a bank is what you get from a bank so he had her he would i don't think she could read English, if I remember correctly. No, I mean, if you look at her script, it's like a five-year-old, you know, writing the M and the A, you know, it was just, you knew that somebody was not fluent in English.

But here's the irony of this whole thing, right? So Mr. Preet Bharara gave Anil Kumar a free pass on Manju Das. He underpaid her. He used her name to hide millions of dollars. The same Preet Bharara arrested an Indian diplomat for underpaying their

home help arrested there with lots of publicity in front of her five-year-old child school Indian so she was a diplomat to the US to the US to the UN Indian diplomat so she lived here she lived in New York and she was a diplomat to the U.S.? To the U.S., to the U.N., Indian diplomat. So she lived here? She lived in New York. And she was underpaying just like this? Like this. I don't know what the numbers were, but that was the charges. Got it.

Rather than go to her house, waited till she took her child to the school, elementary school, arrested her. She claimed diplomatic immunity, which many diplomats have. He took her to jail at 512th Street or wherever it was, did a strip search and a cavity search. Is that what I think it is? Yes. Now, you have a mother, you have aunts, I have daughters, sisters, you know that. A cavity search of a senior diplomat to subject that diplomat to a cavity search because she underpaid her housekeeper.

On the other hand... Why is he... What's he going to find, a tax return on her ass? You should ask him. Well, there's two different types of cavities, right? But anyway. But this caused a diplomatic row between the Indian government and the U.S. government.

Preet, this was when Preet was his most powerful, said, the law doesn't distinguish between da-da-da-da-da, defiant. And the Indian papers wrote, this man should never be allowed to come to India, and if he came, we should arrest him. This is a relatively minor crime. I'm not saying you should underpay your babysitters, housekeepers. I know what you're saying. But it's relatively, and it's something that could have been settled with a fine. But to subject the number two Indian diplomat at the UN to a cavity search. This gives you some glimpse into how when people have unchecked power, they think they're untouchables, right?

Unless you can be a cooperating witness. Unless you have a cooperating witness. That's the whole irony of the story that nobody has written about. And this journalist, as you you said went and met her uh manju das in the village near calcutta they stole her pet he had someone in his family take her now this one is allegedly i don't know if we have proof of this but according to what she said to the journalist they when she arrived when he sent her back to india he had promised her money that he never ended up paying her five thousand dollars right five grand for a lifetime of work anyway promised her that money didn't pay her and then he had i think it was some family over there

come over and confiscate her passport which has to be illegal even in a caste system i assume but they did that when she came here to the u.S., they would confiscate her passport. Then when she went back, the family would confiscate it. When she came back again... But, you know, when you know somebody, and these were all in the discovery process in emails and all of that,

and you want to believe this guy, Anil Kumar's word, and use him as a star witness? You know, if you had solid evidence, you would not resort to this type of nonsense. But they couldn't lose my case because they've started with a huge publicity. They put it out on the mainstream media. And if Mr. Bharara lost this case, that would be the end of his career. Yeah. Now, you ended the contract with Picos, his company, in 05. And the one trade that they

tried to levy there, as we explained, was one where you actually had the opposite. And if that had alone been the thing he was on the witness stand for and there wasn't days and days of other testimony, that would have been an easier argument for, in my opinion, for the jury to remember and be able to put two and two together on the stand. He was there, though, for so much longer because they tried to say that you and him were completely in cahoots in the years after picos the way i put it together is that they tried to explain and this is where rajat gupta is going to come into but they tried to the prosecution tried to create a continuum without distinguishing between picos trading and then what became the new Silk Road slash Voyager, which were entirely separate projects that had nothing to do with... Galleon. Yeah, they had nothing to do with Galleon and they were...

Can you explain what that was? Maybe that's the best way to start. Yeah. So Anil Kumar and Rajat Gupta, Rajat Gupta had stepped down as the CEO of McKinsey as a managing general partner of McKinsey and he was to be clear he was in charge for what like 10 years

yeah and he was the youngest ever to be in charge correct so he was a legend he was a legend in the management consultant world absolutely and he was in the board

after he stepped down he was on the board of Goldman Sachs Procter & Gamble American Airlines Spur Bank whole bunch whole bunch of companies. The Bill Gates Foundation. Bill Gates Foundation. That one too.

He was, you know, blue chip all the way. Right. And so he was looking for a second act. and Anil Kumar came to meet me and said, why don't we start a private equity fund to invest in India, South Asia, Pakistan, Sri Lanka, so on and so forth. I think Sri Lanka, in retrospect, was an afterthought because it's such a small country. And because I was from Sri Lanka, they were trying to recruit me. And I said, okay, because we had just opened an Asia office and we were looking to invest in all of Asia, India being a big component.

And our office was in Singapore. So they said, let's open a hedge fund and a private equity under one umbrella. And they would run the private equity and I would run the hedge fund. It seemed like a good idea to me. So we had these meetings on Saturday by phone, you know, mapping out the strategy. And Anil Kumar was sort of the guy who was spearheading it because he was Rajat's right-hand man at that time.

Rajat was like his mentor kind of deal. Correct. So we started with that. And I didn't like some of what I saw. So I pulled out. And I said, I don't want to be part of New Silk Road. What didn't you like? Well, there was constant bickering about the equity position that Anil wanted all the time, asking for more and more and more while being employed at McKinsey.

I thought that was a conflict of interest. He had said that he was going to leave McKinsey to do this, which seemed fine. But then he said he wants to stay at McKinsey and still be a founder of New Silk Route. And I just thought that was – so I may have been naive in some things, but this one I was not so naive. Anyway, so they raised money with another Wharton gentleman called Parag Saxena. And so New Silk Route was a private equity fund, and Galleon International was a hedge fund which had nothing to do with New Silk.

So you split them up. Split them up. And you took that. I took that. And you put that basically with Galleon then because it was branded under Galleon. No, it started as Galleon. We were going to merge it to create one big investment arm for Asia. But we had already started that business in Singapore with a team of analysts and traders and so on. Got it. So what I didn't like was the constant bickering for more equity and new silk route and, you know, nothing seemed to be enough for Anil Kumar.

So I said, guys, you do you. Plus, I'm not going to call them before I buy China Telecom, have an investment memo, have a huge, it's not like private equity. You know, in the hedge fund world, you buy when the price is right and, you know, you don't need, you sort of need one captain of the ship. So that was one part which I had nothing to do with. Rajat also came to me with another idea to start a fund called the Voyager Fund, which was structured by Lehman Brothers. And the structure was that if we put $50 million,

Lehman would give us $350 million. So it would be a $400 million fund. So way, way over leveraged. Way over leveraged. But when I did the analysis, and we had six or seven different funds in Galleon, if you equally allocated the money over the healthcare fund, the Asia fund, the technology fund, the diversity fund, you never lost money in any year. Over the history of their existence.

Of the history of their existence. Of the history of their existence. And this is what, like 07? Well. When you're running this. Yeah, analysis, 07, right? No, it was 05, right? Either way. It was before 2008, 2009, bottom line.

So when you did that yeah so we said okay and we did well i mean with the leverage we did like 60 in one year and so on and so forth you said it was lehman brothers that had the 350 yeah so when when lehman brothers went under under, our equity got washed out. Right? Mm-hmm. So... You guys lost everything. I lost everything. We lost everything. How much money did you lose and how much money did Rajat, was the other guy involved, how

much did he lose? Well, it depends on how much capital we put in or is it the value that the capital grew to, right? If it is a capital that you put in, I lost $40 million and he lost $10 million. Got it. To get to $50. But if the $40 million had gone to $80 and his $10 million, I don't know the exact numbers, but it had grown. Yeah, he lost everything.

He lost everything. Okay. So he was calling me incessantly to make his 10 million good. And again, we're talking about Rajat. We're going back and forth a little bit between Anil and Rajat, but they are kind of tied together in certain ways. We're talking about Rajat right now. Yeah, we're talking about Rajat at the moment. So Rajat called me and I said, Rajat, you lost 10 million. I lost 40 million. This was not our fault. Lehman went under. It was a historical year on Wall Street.

So we're in September, October 2008 right now. Correct. But he was persistent, saying that I should. Now, I would like a deal where heads, I don't lose anything. Tails, I make a lot of money. But that is how, maybe that's how the consultant world works. But on Wall Street, you sometimes make money, you sometimes lose money. Yeah. So I said no. And he was badgering me so it happened one day when he called me asking me about this

and i said listen i'll give you all the paperwork and you know you can see it um that was the day that he went to a goldman sachs meeting because he was on the board he was on the board and he called me after the gold Goldman Sachs meeting. Because he was on the board. He was on the board. And he called me after the Goldman Sachs meeting. At like 3.54. 3.54, yeah. Your memory is good. So the call was 16 seconds or 25 seconds, I mean something.

And he says in one of his interviews on YouTube that I watched that he doesn't remember anything about that call. And we didn't discuss Goldman Sachs. That was his. And he was saying that besides Raj and I were fighting because I lost $10 million and there was no reason for me to give him any information. And this was on your office line, so it wasn't wiretaps and no one, there's no record of this call other than a record that it happened.

For 16 seconds. Yes. So Andrew Ross Sorkin of CNBC asked me about it. And I said, yes, he called me. And I remember every one of those 16 seconds, unlike Rajat. So he said, what happened? So I said, let me put it in context. I had been buying Goldman Sachs for the past four days because there was a lot of discussion

that the Congress would pass TAP, where TAP stands for Troubled Asset Repurchase Program, where they would buy the troubled assets of these investment banks. Bail out the banks. Bail out the banks. Goldman Sachs being one, Morgan Stanley, J.P. Morgan, so on and so forth. We had a consultant who was at the congressional hearings, totally legitimate, listening to the arguments and at 3.24

I have an email from him saying it looks like TARP would pass now if TARP passed and the government bailed out the banks, the bank stocks were going to go up

significantly because they were priced like they were going out of business. So I had been buying Goldman Sachs previously. I was buying Morgan Stanley. I was buying banks because it looked like, but here it was saying he's confident it's going to pass. You're buying the ETF too, right? XLF? XLF.

Which is all of them. All of them. So as soon as I got there, I called my trader into my office and I said, okay, if we make a bet, remember, we play in probabilities. We don't know what the future holds. So I said, if it's passed, it's good for all banks. But the best positioned banks, I thought, were Morgan Stanley and Goldman Sachs, which we had brought throughout the day before and the day before that. Then I said, let's look at the ETFs. Now, there were two ETFs, XLF and XL,

I can't remember, OFAN. One had a lot of foreign banks like Deutsche Bank, UBS, Barclays. The other one had just U.S. banks. So we wanted, so we're doing some analysis and we said, let's buy the one that's U.S. banks only. Right, because TARP affects that. TARP affects that. So we bought that.

We bought Goldman Sachs and we bought Morgan Stanley. The prosecutors, so when Rajat called me, in that 16 seconds, I said, Rajat, I'm in the midst of a big trade on the financial side because it looks like TARP is being passed. And we are trying to figure out which indexes to buy in addition to individual stocks. And he told me, oh, that's great news for Goldman Sachs. That's great for Goldman Sachs.

I said, listen, I got to call you back. And we put this trade together. And if you look at the records, at about 5.30 or so, I called Rajat and we had a chat for half an hour on his position at Lehman. His position at? Oh, the Voyager. His investment in the Voyager. Because that was being called and going to shit.

So now, after the close, Warren Buffett announced that he was investing in Goldman Sachs. And Goldman Sachs was doing an equity offering. I mean, Warren Buffett was the last thing on my mind. And we participated in the equity offering. And top subsequently passed in the next day, right? A day or two, I'm not exactly sure. And so the government said, Rajat Gupta called Rajaratnam soon after the board meeting

and told him Warren Buffett's going to invest in Goldman Sachs, right? There's not a single recorded call because it happened on my regular phone. And Rajat says he would have never given me that type of information. And he literally had no incentive to do so. No money, nothing, right? You had lost, and not that you lost it, but like Lehman went under.

He was pissed because he lost money and frankly, call it what it is, $10 million to him. Not that he wasn't a wealthy guy, but that's a lot more than $10 million would have been to you. So he's freaking out. I'm losing $40 million, right? Right. And even that though, like you're a lot more wealthy than he is. So he's flipping out, you know? Yeah, he's flipping out. But, you know, he knew the rules of the game he brought the leveraged structure to me

but he didn't like him he didn't like him right but you know i don't like a lot of things too right so um so he testified i mean he went to trial and he lost because our old friend anil kumar testified against Rajat. What did he even know about that, though? I don't know what he testified, but he sort of said there were other benefits to Raj, and he was doing NSA. I don't know. I didn't read the transcripts. I mean, I was just disgusted with Anil Kumar. And what was the thing, because there was only one other thing, and was another call but this one was recorded where it was like three months before maybe like july 24th or some something like that where you were on the phone with with rajat and it has something to do with goldman but then yeah so

let me let me explain that yeah what happened was best ends had gone under and they were one of our prime brokers who went under best turns oh right and they were one of our prime brokers. Who went under? Bear Stearns. Oh, right. Bear Stearns. And they were bailed out by J.P. Morgan, and we had like $400 million of investor capital with them. And I was lucky. So we were reviewing all our relationships, prime brokerisse, Citibank, the money center banks had lots of retail deposits, and they were safe. But Goldman Sachs had no retail deposits.

It was like Bear Stearns, big investment banking, highly leveraged, and we were worried about it. So I called our client executive at Goldman Sachs and said, listen, I am worried about balances with Goldman Sachs. I want to move it to J.P. Morgan or something. Fortunately, we had taken our money, the Galleon funds, out of Lehman prior to them going bankrupt. So you have to manage now counterparty risk. Not only should you worry about stocks, you have to manage your balance sheet for the first time because banks would have gone under.

So they said, don't do that yet. We're going to ask the president of our firm, Gary Cohn, who then became part of Trump's cabinet, to come and meet with you. So Rajat was calling me because KKAR had offered him a position. Kravis' place? Yeah, to work in India, advise them on India. At this point, he's what, like five years out of McKinsey, something like that? Yeah.

Okay. But Goldman Sachs had said that's a conflict of interest. And so Rajat was asking my advice, right? So I said, Rajat, you have NSR in India, private equity. You've got KKR. You've got Goldman Sachs. There's a clear conflict here. You have to decide.

And I had told him that if I were him, I'd take KKR because it's a long-term sustainable model. Now, if he was feeding me stuff, this is admittedly prior to the allegations. But if I was wanting him in a conspiracy to feed me information on Goldman Sachs, I would have never asked him to leave Goldman Sachs to go to Keiko. That's recorded. And so what you did with, I don't know if we said this, but with Rajiv Gold, too. You were telling him to leave Intel. Right. So the facts don't line up, right?

So I asked him, you know, what should I talk to Gary Cohn about? I mean, this company doesn't have money market deposits. They should buy a money market fund bank. That would make me feel a lot safer. I'm worried about the billion dollars that I have with Goldman Sachs of clients' money. Just for people following at home, just trying to make sure that they follow. Essentially, you're talking about liquidity in a damaging event. Prime example, by the way, being, I believe, maybe I'll get this wrong, but I'm pretty sure Lehman had nothing retail. So like when Lehman went under, or Bear Stearns, you already pointed out, they at least got covered for $2 a share. So there was something to get. But like when Lehman went under, the money's gone because they have no deposits to work off of.

Correct. Got it. Okay. So you were worried about the same thing at Goldman. What we call about money center banks like Citibank or JP Morgan that had huge BFA balance. Used to work there. You did? Yeah, I did.

Okay. So I had asked Rajat about what should I talk about, and we talked about Goldman should buy a retail bank like Wachovia, which the ex-head of equities at Goldman Sachs, Bob Steele, was running, and he was a longtime Goldman alum. We were just chatting. A few days, and I had told him up front, I'm meeting Gary Cohn in a couple of days.

What should I do? And we talked about it. That was recorded, but there was no insider trading. And I never traded Goldman for a month after that call. There was nothing to do. So Gary came in with his people and we, senior management of Galleons, and we expressed our concerns. And Gary himself told us that they might buy a money center bank.

And, you know, they were telling all the investors. They were trying to calm us down. And so Lloyd Blankfein, the CEO of Goldman Sachs, Gary is the president, told the jury that, yeah, we were concerned about the liquidity and we were telling our large investors that we are looking to maybe buy a money center bank. But I was not charged, to be fair to Preet, I was not charged with that.

But they used this as an example of the close relationship between me and Rajat Gupta. And this was prior to Lehman failing and Rajat lost $10 million. And so they wanted, Goldman Sachs was a big household name for everybody, you know. And Warren Buffett, you know. So they tried to manufacture this charge against. And to this day, only two people know what transpired on that conference, on that call, the 16-second call.

I don't know if it's 16 or 20, but Rajat and me. Rajat says he doesn't remember. I say I remember every one of those 16 seconds. And I told you what we talked about at the top. Yeah. So Rajat, in my opinion, lies, he lost and went to prison. Now, I maintain that both Rajat and I should have testified. Because he didn't testify either?

Yeah, because our lawyers say, don't testify. Why do they always, every lawyer says this, by the way. Like, this is a common thing. They don't want their client to testify. Why do they always – every lawyer says this, by the way. Like this is a common thing. They don't want their client to testify. Yeah, because they taught in law school that if they testify, the prosecutor might trip them up and bring something random. It's like a right to remain silent kind of thing. Correct. But in certain cases – so one of the jurors I think that you read about, there's

only one juror who talked to the press, said, we would have liked to hear from Raj. Yeah. Right? And my lawyer, John Dowd, told me we had won this 14-0. Right? So you don't need to testify. I believed him because we showed that every one of these conversations were in the public domain, and in every one of these stocks, I had a pre-existing large position.

It was a simple case in my, you didn't have to go stock by stock by stock and, you know, all of that stuff, right? Similarly, I think Rajat, if he had testified, would have won. But you know what? I agree. Hindsight is 20-20. Because his was, by the way, not for nothing, his case, an advantage he had on you is his case was far simpler. It was like one type of event.

You know, they were trying to get a board member of Goldman Sachs, made a few calls to Raj Rajaratnam, talked about some shit as the insider, fed him info, believe it or don't, here's the call record. Sorry, we don't have a wiretap of the one where it matters. That was it. Yeah. But what they tried to do, being mischievous, is they went through my records, Galleon's records, and knew that we had held shares in Procter & Gamble, of which Rajat was a board member. So they tried to make the case more complex. Like he fed me information on Procter & Gamble. Right? But I didn't have a position in Procter & Gamble.

Our consumer durables, consumer goods portfolio manager had. So the narrative was, Rajat told me, I told him, but that didn't pass any mastery in court. Because that was one of the ones, because he was found not guilty of a few counts.

On that one, yeah. So that was one where he wasn't. But then he was found guilty on the Goldman thing, which is a hearsay. Yep. That's nuts to me. And I know the dynamic between the two of you is very very interesting to read about because there's like a weird i don't really know how

to describe it perfectly but i'll do my best there's like a weird mutual respect and bitterness slash rivalry on some stuff just i i get the sense it's because it's very frustrating that like the two of you were tied together and you both felt like or it seems to me like you both felt like if you hadn't been in each other's life i mean this is kind of true too if you hadn't been in each other's lives there would there'd be nothing for them to even try to pull and then you know they did and so then they made these cases and and it it created it created for you it created a forest fire that's what they tried to do they tried to tie it to all these people you know and he's a he's a big sexy name too he was the biggest of all so it's like oh he was getting information from rajat gupta holy shit this knows no bounds let me ask

you is there any incentive for rajat to give me inside information? That's what I haven't found. I don't see it. He was the chairman and managing general partner of McKinsey. McKinsey had information on almost every company in the Fortune 500, right? Yeah. and I firmly believe to this day my analyst did a better job in understanding stocks, the finance, maybe not the strategic view of should Procter & Gamble buy Unilever

or something like that, but that's not the game we play. We did hardcore analysis, balance sheets, cash flows, 10Qs, 10 K's all day long and so the reason our paths crossed before New Silk Route is he was raising funds for a business school in India called the ISB

Indian School of Business and I'd given some money to that school and I thought he was a good guy who was doing some charity. As I got to know the reality, essentially, he was franchising his name to lots of different entities and promising them 20%, 30%, 50% of his time. And so one day I jokingly asked him, how many percent do you have in a full circle? Because he wanted to be chairman of Galleon International

and promised me 20% of my time. I've been in meetings where he's promised 50% and so on and so forth. So he was operating... He's got a lot of percent, man. Well, he was operating a franchise model like McDonald's or Kentucky Fried Chicken, right? And so I respect him for what he achieved in his business career. I didn't like the fact that he was constantly whining and somehow wanted me to make him

whole for a risk that he understood, I didn't bring the deal to him. I didn't force him to sign it. And then he sort of gave the narrative that I stole $10 million from him, which is totally nonsense. Yeah, Lehman went under. Yeah, but he refused to see it that way, even though he knew what the truth was. There are some brilliant people in this world who, by the way, make a lot of money and make a nice life for themselves and have incredible value, which I would describe his career very much as doing that, who they profit in a world – and you said something like this, but they profit in a world where it is subjective. When you are on Wall Street, and there's other things as well, it's more – there's subjectivity.

Don't get me wrong in everything, but it's objective. You win, you lose. You make money, you don't. There's not like all the upside, as you pointed out. And so I think when I read about him and I read about how you two speak on had run in the circles that he had run in, been at the top of the game of the top firm there is, youngest to ever do it. He had Bill Clinton as a client. He was this important guy who was on all these boards and everything. I think it annoyed him that he was worth sub $100 million dollars and then guys like you were were a billionaire

because he's like well what are they doing besides trading stocks right and which is a dumb way to put it but it's like he balances out in life no no i'm with all these important people so i should have more and therefore i could be a guy who has a foundation like instead of the gates foundation it's the gupta foundation and so what he's not taking into account is that in your line of work, it is scared money don't make no money, right? Like when you don't make money, you lose. So the best of the best make it and you see the hedge funds that close up. They lost everything, right? They got nothing.

And so when you're one of the rare top of the class to be the best at it, yeah, the upside's insanely good as you're compounding money on top of each other year in, year out because you're good at your job. Well, I would, the fallacy, if that's his way of thinking, and I think there's a lot of truth to what you're saying. The fallacy, when you try to measure your contribution or your self-worth based on somebody's net worth. That's always a losing proposition because there's somebody richer than you, more famous than you, and at least more popular and more successful as you. I've never understood that, but yes. Now, if you tell me genuinely that you found a way to take all the money that you have

to heaven, then I can understand the reason to chase after money. I can honestly tell you, I did what I did in becoming a hedge fund manager because I was actually so passionate about stocks and, more importantly, companies that were disrupting the way we live. Disruptive companies, the Googles, the Facebooks. I'm spending a lot of time now on the metaverse and artificial intelligence and cryptocurrency because that's how I get my jollies. Whether I make money or not in them is not as important as my mind being active. And you're a young guy. But I've met guys who are 80, 85,

ex-hedge fund managers, legends in our business, who are 80, 85, ex-hedge fund managers, legends in our business, who are mentally sharp because they're constantly mentally expanding their horizons of thinking, be it the yen, the dollar, whatever macro interest rates and all of that. So two points. One is if you measure your worth

based on how much money you have or don't have. I can promise you this. When Rajat Gupta was 20 years old and somebody said at 65 you'd be worth $100 million, he would be happy. Yeah, he'd sign up. What? He'd sign up. He'd sign up for that, right? To be unhappy.

But I think there's another angle. People like Anil Kumar and Rajat Gupta and many consultants were the top of their class at business school or wherever they went to. They reach a certain age and they say, how are all these other guys making all this money? And we are supposed to be the top of the class. But they don't understand. They can't do my job. They don't have the stomach for risk.

You have to get used to getting your butt whooped so many times and bounce back. You get a report card every day at 4 o'clock. At 4 o'clock, I would look at my P&L. And I could have made $50, $60, $70 million for my investors, not for myself. Or I could have lost that. And when you lose that type of money, you know, your head spins. I used to always walk back from work because I needed the 10 or 15 minutes to clear my head. And if I lost money, I would sort of feel that there was a big L, loser, on my head. And

when I lost money and went home, my wife looked like a devil. My children looked like little devils. And when I made money, my wife looked like a saint and my children looked like angels. The point is we took enormous amount of pressure and we got a report card every day. Okay? So if you had that skill set, right, then you could be a hedge fund manager now if i could

sing like jay-z i may be worth i don't know what it's worth five million but i don't lose one ounce of sleep worrying about what jay-z's net worth is, it's like a billion now. He's doing well. He's doing well. He's balling. He said, Beyonce is probably worth another. Beyonce's doing okay, too. Yeah, I mean, so they're doing okay.

They're doing okay. God bless them. I can't sing like him. So he's got a skill. And so I think it's a dangerous emotion to have. But I know people who, I mean, I'm comparative,

Rajat's comparative, but we're comparative in different things. If he was not comparative, he wouldn't have been the youngest managing partner of the bluest chip. And remember, he's not a white American. Yeah. You know, he was a foreigner, South Asian.

And so he achieved tremendous amount of success. But whether it's Raj, Rajaratnam, or Rajat Gupta, the real villain in this saga that we went through, and Rajat also understands that, is Preet Bharara, whose ambitions blinded him from searching for the truth and winning. And that is what all Americans, including you and I, need to worry about. And we can't keep silent.

And it's a symbol. I mean, to your point and to your credit also, you say it's certainly not all of them or anything like that. There's plenty of good ones out there. But there are people who take advantage of that seat, and he's a guy who, when you look at it, to me, a thing, like I said earlier, that gives me pause is when someone is just touting their record left and right. And that has happened over and over the issue of cooperating witnesses and what they do to them. And, you know, some of them I genuinely feel bad.

They're in a really tough spot, you know, where would you say the one line they said to the one guy was you're not going to see your kids for 25 years or something? They said that to me. And they said that to you too. And to Adam Smith. Yeah. I mean, that's a 13-year-old boy watching his father being led in handcuffs.

Right? Yeah, it's traumatizing. And that's the human cost of somebody's ambition. Right? Now that he's out of the publicity and the power seat, he's talking about justice reform.

And he wrote, Preet Bharara wrote a book about, children's book about justices. And people are sobering up because the whole financial crisis and the drama with that is over. And even the second circuit is defining insider trading in a way, five years after my case, that I would have never been charged. Didn't he also lead a task force? Yeah, called the Barara Task Force. On insider trading. Appropriately putting his name up front on insider trading and concluded that insider trading laws were murky and they feel sorry for the market participants. Then why did you send 80 people to jail? Including people whose convictions ended up being thrown out on shit evidence. But years later, after my case, you know, the Newman case, right, where the Second Circuit said, you must know that an insider violated a fiduciary responsibility

and you paid a benefit. And they scolded Barra for the doctrinal novelty of his approach to insider trading. But me being the first one, I got a few of the arrows. But, you know, I'm standing, I'm smiling, and I got a lot of life to live. And, you know, I want to talk about uh because i think it's an important issue yeah clearly i mean it's it's very it's kind of surreal to listen to you talk about this and and you're missing the mustache now too that's killing me yeah what happened here people ask me you know what happened to your mustache that was like the best mustache in the game. Yeah. What happened, the true story is that during COVID, wearing that mask.

Ah. And so one day I said, this is annoying me, right? So I said, let me just shave it. But remember, before I had a mustache, I had no mustache. When I was born, I didn't have a mustache. Oh, you didn't? No. So people, I mean, one reporter asked me, what didn't have a mustache. Oh, you didn't? No.

So people, I mean, one reporter asked me, what happened to your signature mustache? I said, oh, man, you know, it was COVID. I wish I had a story, a more interesting story. Was that in place every day, or did you have to, like, put some gel in that? Which one? The mustache. It was a good-looking mustache.

You should have trademarked that thing. I've never thought of it that way. I used to trim it, right, just the edge if it came over my lip. When Mark sent me the book right here, I'll hold this up again. I got this in the mail, and I'm like, who the fuck? Oh, that's him. Wow. Like, I didn't even recognize you without it.

So now when I'm in person with you, now I recognize you. Like, you look the same. But without the mustache, it is interesting. So, I mean, and again, how did I see that mustache for the first time? I saw that on a perp walk. You know, that's another thing. That's another thing. Why would you do a perp walk?

It's a walk of shame. In front of all the cameras. Even before you were charged formally or you appeared in court. And this is the one thing that Bharara in one of his podcasts, I heard, I didn't see it, that he regretted doing that. But remember, when you are in the limelight, you're the sheriff of Wall Street, you are pumped up, you know, you're ready for the Broadway.

Right? You do things. We all do things. Right? That we may regret. Sure. But he's in a position where he can't say he made a mistake because the magnitude of the impact of his mistakes or enthusiasm to put people away while not touching a single bank executive,

if that was his legacy for somebody who wants to be in the limelight, it's a very tough pill to swallow. I would argue, and again, not an attorney here, so this is a totally uneducated opinion, but just putting the tea leaves together. If there were some admissions made, let's say around your case, and those admissions started with the basis of your case and the evidence they gathered and stuff like that, and then even worked its way towards something like what his task force said where they put it all together and then said well this really shouldn't have been tried i think that there would be a string of literally all 80 90 of those convictions where one by one they'd be off the record and taken out and so it would be forget destroying his legacy it would completely i can't believe you say words legacy about a prosecutor that's another thing like i don't need to that. But it would it would destroy any quote unquote work he did that was worth attention. And so it's like in a weird way when I look at crime and how we look at it in society, it it does have like there's human lives that are caught in the middle of it, including the families and the friends and the businesses and stuff that are around people. But it's also – it's this weird symbolic thing.

You are a pawn on the board. This other guy over here, whoever it is, is a pawn on the board. And once you add up all the pawns together, they matter. Alone, maybe not. But you put them together, now you've got a problem. And some are more important than others. The 180 people I had to lay off. Yeah.

I mean, I would guess that as a collective group, the employees of Galleon paid $300,000, $400,000, $500,000 in taxes each year. Right? They had dependents. We had investments from the teachers' unions, from state pension funds, people's 401k that we managed, and I think managed reasonably well. So, I mean, the impact is not about one single individual or a handful of individuals. And this is where unchecked power should not be given to anybody. And we're in an era where the ex-president thinks he had unchecked powers.

And, you know, that's a whole different issue but we'd be here a long time if we started going into that i want i want to make sure just because we have covered a lot of ground there's some things in my head right now that we're coming towards the end so we're not going to get to and maybe we'll do that another time i know mark and i talked about seeing how this went and then i won't say we'll talk off camera, but a couple ideas we had that might be kind of cool and interesting for like some debates on this moving forward. But the – Anil Kumar, the end of that, I wanted to make sure we got to just to put a little cherry on top of this because, again, that was the main – he was the main guy. I think the prosecution called him like – they're just marketing him, but they're like he's the greatest witness we've ever dealt with or some shit like that but he as you said oh five you terminate the picos agreement and then the thing that was going back and forth with you guys was that whole new silk

road which as we covered you ended up separating out into two because you were annoyed at how much equity and neil and and kind of rajat were asking for was there any was there anything else where you guys were in any way financially tied together besides those two things no okay so those were the two so what the we talked about that trade where you did the opposite where he said go long but you were really short and that covered the Picos era during during the New Silk Road era, so to speak, what were the trades that he was, what's it called, testifying about? So in that era, when we were forming New Silk Road, and we were going to be one entity. Just make sure you're talking to the mic, sir.

That we were going to be one entity. Just make sure you're talking to the mic, sir. That we were going to be one entity. He wanted, remember, he paraded as an expert on India. Right. Because he had spent years there. He wanted to invest in indian stocks so i carved out a portion of galleon international or prior to that was called new silk road international right and gave him 25 million dollars to invest to see whether he could invest oh here was a question i don't want to forget this this is important because you had the way i read this is he literally was in charge of the trades correct was he was he licensed 66 series 7 no

how can he do that then no because um not all hedge fund investors uh you know i have 63 and series 7 and all of that but i was a broker at one time. You're not a broker dealer. Okay, because I was confused. This is where it loses me, because I worked on a different part of the business on Wall Street. Yeah, you worked on the private client side, right? Right, but what's the deal? Because he's trading other people's money.

But these are accredited investors, so-called sophisticated investors. You had a net worth of so much, and so on. So they waived that need. That need, yes. I didn't know that. Wow. So we gave him an India book, we called it. And every week we'd have a conference call just to see what he's doing and so on and so forth.

He denied the existence of the India book, even though we had all the trades. We had called it the India book at Morgan Stanley. It was just lying. And in the India book, in any book, if I have a technology book, documents said that we could buy up to 20% in any other, just to give us flexibility. Right. So you could buy Procter & Gamble or something. Correct. Outside tech, right.

He bought AMD in the India book. Okay? Mm-hmm. I mean, it was such a small book, $25 million out of a multi-billion dollar thing. So we'd have this conference call, and he said, I bought AMD, and I said, why are you buying AMD? And he said, you know, there's going to be an investment by the Abu Dhabi Investment Corporation. I had already known that, but it was in the papers for years.

I mean, for months, sorry. And I had already owned AMD. In your own portfolio. In my own portfolio. Right. Here's even better than that. Arctic, which was the Abu Dhabi investment sovereign wealth fund, was an investor in Galleon,

had a conference call with me and a presentation where the slides I presented to them about AMD. It was all based on public information. I got you. So Anil Kumar said, oh, I told him that Arctic was going to invest in AMD and they were going to have a handshake or something. What was in the papers, AMD was running around the street talking to anybody that they could that they were going to invest.

Arctic was going to invest in AMD. Yeah, they know it's going to help their price too. Correct. They have a reason to do that. So that's what it was. That's all. No, no. Let me finish the story.

Yeah. I had a rule that if you lost 20 or 25 percent, I think it was 20 percent, I would pull the money. Very quickly, he lost 20 percent or 25 percent, and I pulled the money. And he was angry about that. Because he also, you paid on profit, too. Yeah. So is that how it worked with him? Yeah.

Everybody the same. So I didn't pay him anything. Did you pay him something before that, though? Before that, because for helping set up doing all the work. Fair. The paperwork. And I paid him the same that the private equity business paid him. Do you know how much that was? I think it was a million dollars.

Okay. business paid him. Do you know how much that was? I think it was a million dollars. Remember, the Galleon International Fund, we went marketing, joint marketing to many places in the world. When we were running it on our own, it was $250 million. When we launched it, it was $1.5 billion.

And so with a 2% management fee, I was getting $30 million a year. And he wanted equity in the Galleon International Fund. So I discussed this, and it's on a recorded call with Rajat and Parag, who was the other partner. And I said, listen, i'm just going to give him a million dollars to just walk away i can't deal with this shit and they they paroxysm put his hand up and said you know oh give me a million if you're joking about it you're all in the open i could see how this plays out in court though and the prosecutors pointed this going see see yeah it's but you know you have

to go through this is why I think I should have testified. Yeah, I agree with you. Yeah. And the other thing was that at the beginning of your chapter on Anil, when you first brought that up in your book, and again, your book is Uneven Justice. Everyone should check it out. It's a very well-written book, I might add. You're a very good writer. And you wrote this by hand in prison

yep that's wild that's amazing but i tell you what i learned i had so much respect for shakespeare and mark twain oh yeah i mean they didn't have computers and spell checks and you know it's not an easy test no no i'm very impressed but you opened up the chapter talking about him, and as far as I know, the government hasn't charged you with homicide, right? Because that was a homicide. I'm going to read this opening paragraph because it's interesting when you look at – when we talk about coerced witnesses and people who have dirt on them and things to lose and then will say anything. You also look at personality because like someone like danielle chiesi she was like fuck this i'll i'll do whatever she's a gangster right exactly and like you know you went in there and said i think i think i'm gonna win you know and what is it remember i was backed by some of the most senior lawyers in america

who said you're gonna win yeah well so Yeah. So what am I going to do? Again, and they might be incentivized to say that because you're paying them a lot, but still. But I mean, I don't know whether everybody's motivated, but I genuinely felt that doubt worked as tough, but it was not an even playing field. Look, all I ask and all you should ask and everybody is an even playing field.

Yes. Play by the rules. We can disagree. Let's chat. and if you want to go to trial hold the defense side to the same standards yes or hold the prosecutors to the same standard that you're holding the defense fair well this this was that opening paragraph for people to hear it says anil kumar was arrested in new york at the same time i was on the morning of october 16th 2009 i was let out of my building in handcuffs anil was rolled away on a hospital gurney he fainted into the arms of the fbi agents arriving at his apartment to arrest him the image perfectly illustrates this man's ever-enduring weak nature in this pivotal moment

he was unable to stand up for himself indeed he was unable to stand up at all that's just like it is true that's a murder right there and that is true you can go read the media reports that's been reported like he he passed out against the wall and i think he split his head open or something i don't know about that but i know he was taken in a hilarious and and it's just it's interesting because if you don't think that the FBI right there knew they had him, I mean, holy shit. It's over. It's like, oh, we got this case. But again, they didn't – they wanted – we could sit here and talk about this, but they wanted to go after Cohen, who – that's a whole other story.

We'll have to talk about that another time. And I think that they just viewed you guys as a pawn to get there. And the last thing – this this should be hit because i particularly liked this a lot about you and it's not something you see that much but they did not allow they didn't allow a lot of things at trial but they didn't allow your side to present the evidence of how much money you've given a charity yeah so i believe they let the one guy the guy who runs the one charity you've been very involved with in particularly jeff canada harlem children's zone they at least let him testify but not say how much right not say

anything you know the day i walked into the harlem children's Zone and I came home and I looked at how privileged my kids were going to private school and how these kids, their vocabulary by the age of four is 30-40% of somebody who has more advantages. I said, I have to do something about it. But it's not the money I gave. I went on a trip with my family to the Galapagos. You know, you went on a boat and saw

all these amazing trip. If you haven't done it, you should do it. But I came back. And I went to Harlem Children's Zone. And I, you know, I said, what are these people learning about Darwinism and theory? And they said, grade 10 or 11. And I said, okay, I'm going to send the entire class to Galapagos on this boat so they could see the iguanas and the turtles and swim with the penguins. And many of these kids didn't have a passport. So they had to go. I had to give them some notice. And so, I mean, those are some of the real things in life, right,

that you, that I enjoy doing. And so Jeff Canada testified that he never had to ask me for money. Like a lot of his job was dialing for dollars because the budget got bigger and bigger and bigger. And he said, Raj voluntarily would say, okay, Jeff, I'm sending so much, whatever. But the judge curtailed his evidence so much. Because you never told anyone about this either. No.

You were private with all your donations. I like that a lot. Correct. So Jeff is one of my closest friends, and I have a lot of time for him. And I hope he joins me in this journey about he's very disturbed by the Central Park Five and where Trump said they should be executed. And they found out they were exonerated because the wrong DNA and so on and so forth. So, again. And they didn't get an apology for that. Yeah.

And the prosecutor maintains that she was right. Right. So it's just not a system that we can condone. Having said all of that, I've said in my book, this is a great country, the greatest country for people because we can speak out. You can speak out. I can speak out.

But not everything is right. And so we have to at least talk about it and begin a discussion and see where it takes us. I agree. And I think today was a good start going through your particular case. And I'll review everything we talked about, and I'll even make some notes on all the things we didn't get to for the future just to be able to hit on it. But I really appreciate you doing this. Thank you.

I mean, thank you for your time. Of course, of course. And I like the people around you a lot too. I do make judgments on that with people, and Mark and Benayek are great guys. They're great guys. But Raj, thank you, man. Much appreciated.

Glad to see you're doing well. We'll have to talk. I've got to get some thoughts on your investments off camera. I want to hear about that. But very, very cool to hear the story. Do you invest in the market? I do a little bit, but I'm more invested in this right now, I'll admit. I just heard you say cryptocurrency, and that's interesting to me.

Yeah. You know. All right. We'll chat about it. And then next time you're in here, we're going to have to have an investment talk, too. Because that's talking to a legend. So anyway, everybody else, you know what it is. Give it a thought.

Get back to me. Peace.