Securities and Exchange Commission v. Galleon Management, LP et al

Filing 238

RESPONSE re: 234 Rule 56.1 Statement , RAJ RAJARATNAMS RESPONSE TO PLAINTIFFS STATEMENT OF UNDISPUTED MATERIAL FACTS AND COUNTERSTATEMENT OF UNDISPUTED MATERIAL FACTS. Document filed by Raj Rajaratnam. (Lynam, Terence)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------------x
SECURITIES AND EXCHANGE COMMISSION,
:
:
Plaintiff,
:
:
- against :
:
RAJ RAJARATNAM, and
:
GALLEON MANAGEMENT, L.P.,
:
:
Defendants.
:
------------------------------------------------------------------------x

No. 09 Civ. 8811 (JSR)
ECF CASE

RAJ RAJARATNAM’S RESPONSE TO PLAINTIFF’S
STATEMENT OF UNDISPUTED MATERIAL FACTS AND
COUNTERSTATEMENT OF UNDISPUTED MATERIAL FACTS
Pursuant to Rule 56.1 of the Local Rules of the Southern District of New York,
Defendant Raj Rajaratnam submits this Response to Plaintiff’s Statement of Undisputed Material
Facts and Counterstatement of Undisputed Material Facts.
The SEC moved for summary judgment on insider trading liability as to only five stocks,
Akamai, ATI, Clearwire, Intel, and PeopleSupport (the “Collateral Estoppel Stocks”). The
SEC’s argument in support of liability on the Collateral Estoppel Stocks is based exclusively on
the theory that Mr. Rajaratnam is collaterally estopped from defending against the SEC’s
allegations concerning them as a result of his conviction for similar conduct in the parallel
criminal case, United States v. Rajaratnam, 09 Cr. 1184. Mr. Rajaratnam does not dispute that
collateral estoppel applies to the SEC’s insider trading allegations concerning the Collateral
Estoppel Stocks. As a result, many of the paragraphs in the SEC’s Statement of Undisputed
Material Facts are actually immaterial to the SEC’s claims against Mr. Rajaratnam and are not
appropriately included in a Rule 56.1 Statement.

Mr. Rajaratnam’s Counterstatement of Material Undisputed Facts follows his below
response to the SEC’s Statement of Undisputed Material Facts.
MR. RAJARATNAM’S RESPONSE TO SEC’S
ASSERTION OF UNDISPUTED MATERIAL FACTS

EVIDENTIARY
SUPPORT

1. The Commission filed its Second Amended Complaint in this
action on January 29, 2010.

Ex. A-1.1

Rajaratnam Response: Undisputed.
2. This Court has jurisdiction over this action pursuant to
Sections 20(b), 20(d), and 22(a) of the Securities Act [15 U.S.C.
§§ 77t(b), 77t(d), and 77v(a)] and Sections 21(d), 21(e), and 27 of
the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

Exs. A-1, ¶ 4; A-2, ¶ 4; A-7,
¶ 4.

Rajaratnam Response: Undisputed.
3. Venue lies in this Court pursuant to Sections 20(b) and 22(a)
of the Securities Act [15 U.S.C. §§ 77t(b) and 77v(a)] and
Sections 21(d), 21A, and 27 of the Exchange Act [15 U.S.C.
§§ 78u(d), 78u-1, and 78aa].

Exs. A-1, ¶ 5; A-2, ¶ 5; A-7,
¶ 5.

Rajaratnam Response: Undisputed.
4. Raj Rajaratnam (“Rajaratnam”) is the co-founder and the
Managing General Partner of Galleon Management, LP
(“Galleon”).

Exs. A-1, ¶ 7; A-7, ¶ 7.

Rajaratnam Response: Undisputed.
5. Prior to founding Galleon, Rajaratnam worked at Needham &
Co., a registered broker-dealer, for 11 years, at which time he
held Series 7 and Series 24 securities licenses.

Exs. A-1, ¶ 7; A-7, ¶ 7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
6. On January 20, 2011, the United States filed a Second
Superseding Indictment (the “S2 Indictment”) against Rajaratnam
in the matter U.S. v. Raj Rajaratnam, S2 09 Cr. 1184 (RJH)
(“U.S. v. Rajaratnam”).

Ex. A-4.

Rajaratnam Response: Undisputed.

1

All citations are to exhibits attached to the accompanying Declaration of John
Henderson in Support of Plaintiffs Motion for Partial Summary Judgment against Defendants
Raj Rajaratnam and Galleon Management, LP.

2

7. The S2 Indictment charged Rajaratnam with nine counts of
securities fraud, in violation of Sections 78j(b) and 78ff of
Title 15 of the United States Code, Section 2 of Title 18 of the
United States Code, and Sections 240.10b-5 and 240.10b5-2 of
Title 17 of the Code of Federal Regulations.

Ex. A-4.

Rajaratnam Response: Undisputed.
8. The S2 Indictment also charged Rajaratnam with five counts
of conspiracy to commit securities fraud.

Ex. A-4.

Rajaratnam Response: Undisputed.
9. From March to April 2011, Rajaratnam was tried on the S2
Ex. A-6 at 1; 5649:17-19.
Indictment before a jury in the United States District Court for the
Southern District of New York, with Judge Holwell presiding
over the trial.
Rajaratnam Response: Undisputed.
10. On May 11, 2011, a jury convicted Rajaratnam of all 14
counts in the S2 Indictment.

Ex. A-5.

Rajaratnam Response: Undisputed.
11. Galleon, a Delaware limited partnership, is a registered
investment adviser based in New York, New York, that, as of
March 2009, had over $2.6 billion under management.

Exs. A-1, 6; A-2, ¶ 6.

Rajaratnam Response: Disputed. Galleon filed with the
Securities and Exchange Commission Form ADV-W on
March 31, 2010, voluntarily withdrawing its registration as an
investment adviser.

Declaration of George Lau
in Support of Defendant
Galleon Management, LP
Opposition to Motion for
Partial Summary
Judgment at ¶ 5.

12. Galleon was founded in 1997 and registered with the
Commission in January 2006.

Exs. A-1, ¶ 6; A-2, ¶ 6.

Rajaratnam Response: Undisputed.
13. Galleon was the investment manager for several hedge funds,
including, among others, Galleon Technology Offshore, Ltd.,
Galleon Diversified Fund, Ltd., Galleon Emerging Technology
Offshore, Ltd., Galleon Buccaneers Offshore, Ltd., Galleon
Explorers Offshore, Ltd., and Galleon Strategic Fund, Ltd.

Ex. A-2, ¶ 6.

Rajaratnam Response: Undisputed.
14. In the aftermath of the October 16, 2009, arrest of
Rajaratnam on insider trading charges, Galleon began the process
of liquidating itself and the hedge funds it advised.
Rajaratnam Response: Undisputed.

3

Ex. A-6 at 3954:4-3956:1;
4656:14-21.

15. Rajaratnam was the Portfolio Manager of several hedge funds Exs. A-1, ¶ 7; A-7, ¶ 7;
for which Galleon was the investment adviser, including the
Ex. A-6 at 2562:15-22.
Technology Offshore Fund, Technology Partners Fund, and
Technology MAC Fund (collectively, the “Galleon Tech funds”)
and the Diversified fund.
Rajaratnam Response: Undisputed.
16. Rajaratnam controlled the trading accounts in which the
Galleon Tech funds and the Diversified fund traded the stocks at
issue in connection with this motion including with respect to:
Rajaratnam Response: Immaterial because of collateral
estoppel.
(a) Intel Corporation
Rajaratnam Response: Immaterial because of collateral
estoppel.
(b) Clearwire
Rajaratnam Response: Immaterial because of collateral
estoppel.
(c) Akamai
Rajaratnam Response: Immaterial because of collateral
estoppel.
(d) ATI.
Rajaratnam Response: Immaterial because of collateral
estoppel.
17. The S2 Indictment charged Rajaratnam with securities fraud
on the basis that he caused the Galleon Tech and/or Diversified
funds to execute transactions in the securities of Intel Corp.
(“Intel”) in or about April 2007 on the basis of material,
nonpublic information.

Ex. A-6 at 2565:15-2567:12,
3363:15-3364, 3608:1-15,
5129-5131:19, 5135:205138:15;2 Ex. T [GX 101]),
Ex. A-6 at 3373:1-3383:1;
Ex. C [GX 4]);
Ex. A-6 at 2453; 3391:1022; Ex. G [GX 9]);
Ex. A-6 at 2453; 3470:73471; Ex. Q [GX 41]); and
Ex. A-6 at 3414-3418:23,
3422:14-3425:3, 3427:113428:21; Ex. N [GX 20-R].
Ex. A-4 ¶¶ 40-41 (Count
Fourteen).

Rajaratnam Response: Undisputed.
18. Rajiv Goel testified at Rajaratnam’s trial.

Ex. A-6 at 1560:7-11.

Rajaratnam Response: Undisputed.
19. Goel and Rajaratnam were close friends.

Ex. A-6 at 1571:11.

Rajaratnam Response: Immaterial because of collateral
estoppel.

2

“GX” means “Government Exhibit,” and refers to exhibits that the United States put in
evidence in United States v. Rajaratnam.

4

20. Goel and Rajaratnam studied together at Wharton Business
School.

Ex. A-6 at 1572:15-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
21. Afterwards, they kept in touch, to the point where they and
their families vacationed together.

Ex. A-6 at 1572:13-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
22. Rajaratnam told Goel that he worked at a fund in New York
called Galleon, that Rajaratnam functioned as Galleon’s CEO,
and that Rajaratnam was managing money at Galleon.

Ex. A-6 at 1572:19-1573:1.

Rajaratnam Response: Immaterial because of collateral
estoppel.
23. Goel knew that Rajaratnam traded stocks and made money
for his investors.

Ex. A-6 at 1573:2-6.

Rajaratnam Response: Immaterial because of collateral
estoppel.
24. Rajaratnam helped Goel financially in at least three different
ways.

Ex. A-6 at 1576:11.

Rajaratnam Response: Immaterial because of collateral
estoppel.
25. Rajaratnam lent Goel $100,000 when Goel was buying a
house in 2005.

Ex. A-6 at 1576:11-12;
1577:5-7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
26. Goel never repaid Rajaratnam for the loan.

Ex. A-6 at 1590:20-25.

Rajaratnam Response: Immaterial because of collateral
estoppel.
27. Rajaratnam gave Goel $500,000 in 2006.
Rajaratnam Response: Immaterial because of collateral
estoppel.

5

Ex. A-6 at 1576:17; 1577:811; 1591:22-1592:14.

28. In or around 2005, Goel asked Rajaratnam to make Goel
money by trading stocks in Goel’s account.

Ex. A-6 at 1576:20-25.

Rajaratnam Response: Immaterial because of collateral
estoppel.
29. From 2007 to 2009, Goel frequently spoke with Rajaratnam
both by phone and in person.

Ex. A-6 at 1573:21-1574:3.

Rajaratnam Response: Immaterial because of collateral
estoppel.
30. Intel is a microprocessor manufacturer headquartered in
Santa Clara, California and it is a publicly-traded company.

Ex. A-7, ¶ 34; Ex. A-6 at
1567:5-9.

Rajaratnam Response: Undisputed.
31. Goel began working at Intel in January 2000.

Ex. A-6 at 1562:17-20.

Rajaratnam Response: Immaterial because of collateral
estoppel.
32. Goel worked in Intel’s treasury department.

Ex. A-6 at 1562:17-20.

Rajaratnam Response: Immaterial because of collateral
estoppel.
33. Intel’s treasury department reported to Intel’s Chief Financial
Officer.

Ex. A-6 at 1564:6-9.

Rajaratnam Response: Immaterial because of collateral
estoppel.
34. As a member of Intel’s treasury department, Goel worked
with Intel Capital.

Ex. A-6 at 1564:12-13.

Rajaratnam Response: Immaterial because of collateral
estoppel.
35. Intel Capital invested money in strategic companies that
would further the strategy of Intel.

Ex. A-6 at 1564:14-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
36. Goel’s responsibility was to consider whether it made sense,
financially, for Intel to participate in a deal, and how to structure
such deals.
Rajaratnam Response: Immaterial because of collateral
estoppel.

6

Ex. A-6 at 1564:22-24.

37. Goel became a managing director of Intel’s treasury
department in approximately 2006.

Ex. A-6 at 1565:17-19.

Rajaratnam Response: Immaterial because of collateral
estoppel.
38. As a managing director, Goel continued to support the Intel
Capital team.

Ex. A-6 at 1565:20-22.

Rajaratnam Response: Immaterial because of collateral
estoppel.
39. While working at Intel, Goel had access to nonpublic and
confidential information about Intel.

Ex. A-6 at 1567:10-15.

Rajaratnam Response: Immaterial because of collateral
estoppel.
40. Goel knew, upon joining Intel, that he was obligated to keep
nonpublic and confidential information that he learned while an
employee of Intel, and to share such information on an as-needed
basis and only if it was for the benefit of Intel.

Ex. A-6 at 1567:16-24;
1582:4-11.

Rajaratnam Response: Immaterial because of collateral
estoppel.
41. Goel violated his obligations with respect to nonpublic and
confidential information of Intel by sharing that information in
violation of the policies that were outlined to him.

Ex. A-6 at 1567:2-5.

Rajaratnam Response: Immaterial because of collateral
estoppel.
42. Goel shared information with Rajaratnam.

Ex. A-6 at 1568:1-10.

Rajaratnam Response: Immaterial because of collateral
estoppel.
43. Goel told Rajaratnam that Goel worked at Intel in the
treasury department and with Intel Capital employees.

Ex. A-6 at 1573:13-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
44. Rajaratnam asked Goel for information about Intel.
Rajaratnam Response: Immaterial because of collateral
estoppel.

7

Ex. A-6 at 1575:1-2.

45. Rajaratnam told Goel that he was trading Intel stock.

Ex. A-6 at 1575:11-13.

Rajaratnam Response: Immaterial because of collateral
estoppel.
46. In violation of his obligations to Intel, Goel shared with
Rajaratnam Intel earnings and financial information, as well as
information regarding strategic investments that Intel was going
to make.

Ex. A-6 at 1568:12-1569:10.

Rajaratnam Response: Immaterial because of collateral
estoppel.
47. The Intel earnings or financial information that Goel shared
with Rajaratnam related to the first quarter of 2007.

Ex. A-6 at 1568:19-21.

Rajaratnam Response: Immaterial because of collateral
estoppel.
48. In April 2007, a colleague of Goel’s in Intel investor
relations, Alex Lenke, shared with Goel information about Intel’s
quarterly earnings for the first quarter of 2007.

Ex. A-6 at 1569:3-12.

Rajaratnam Response: Immaterial because of collateral
estoppel.
49. Lenke testified that in April 2007, Goel wanted to know
about Intel’s earnings.

Ex. A-6 at 933:4-9.

Rajaratnam Response: Immaterial because of collateral
estoppel.
50. Lenke told Goel information about Intel’s revenue numbers
and margins.

Ex. A-6 at 1647:14-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
51. Lenke updated Goel about Intel’s business outlook.
Rajaratnam Response: Immaterial because of collateral
estoppel.

8

Ex. A-6 at 1647:22-1649:5.

52. During one of the update calls, Goel learned information that
was “in kind of the opposite direction of the earlier” information.

Ex. A-6 at 1650:16-21.

Rajaratnam Response: Immaterial because of collateral
estoppel.
53. Goel knew that the information he received from Lenke was
confidential because Intel had not yet released the information.

Ex. A-6 at 1569:13-19.

Rajaratnam Response: Immaterial because of collateral
estoppel.
54. Goel informed Rajaratnam as to Intel’s revenue and gross
margin for the first quarter of 2007.

Ex. A-6 at 1651:7-12;
1675:18-1676:1.

Rajaratnam Response: Immaterial because of collateral
estoppel.
55. Goel informed Rajaratnam of updates he received from
Lenke.

Ex. A-6 at 1676:4-15.

Rajaratnam Response: Immaterial because of collateral
estoppel.
56. Goel gave the information to Rajaratnam because he and
Rajaratnam were good friends.

Ex. A-6 at 1575:18-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
57. On April 9, 2007, approximately one week before Intel’s
earnings announcement, Lenke learned that Intel’s quarterly
revenue would be “significantly worse” than in prior years.

Ex. A-6 at 934:2-937:4;
Ex. AAA [GX 1070].

Rajaratnam Response: Immaterial because of collateral
estoppel.
58. On April 9, 2007 at 10:15 a.m., a telephone call lasting 3
minutes was placed from a line subscribed to Goel to a line
subscribed to Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.

9

Ex. A [GX 2]; Ex. A-6 at
3368:13-3371:6.

59. On April 9, 2007 at 11:21, Rajaratnam sent an instant
Ex. ZZ [GX 1033]; Ex. A-6
message to Ian Horowitz (“Horowitz”) that stated “short 1 million at 3371:7-3372:11.
intc.”
Rajaratnam Response: Immaterial because of collateral
estoppel.
60. From 2006 forward, Horowitz was a trader at Galleon who
traded Rajaratnam’s accounts.

Ex. A-6 at 2654:5-8.

Rajaratnam Response: Immaterial because of collateral
estoppel.
61. Rajaratnam caused the Galleon Tech fund to sell short
1 million shares of Intel on April 9, 2007.

Ex. C [GX 4].

Rajaratnam Response: Immaterial because of collateral
estoppel.
62. GX 4 is a summary chart that reflects Galleon Tech and
Diversified trading in Intel stock from April 9, 2007 through
April 17, 2007.

Ex. C [GX 4]; Ex. A-6 at
3373:1-4.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
63. FBI Supervisory Special Agent James C. Barnacle (“Agent
Barnacle”) testified at Rajaratnam’s trial.

Ex. A-6 at 3351:4-9.

Rajaratnam Response: Undisputed.
64. The information in summary chart GX 4 was verified by
Agent Barnacle by reference to GX 150; GX 100-D; GX 308;
GX 309; GX 310; and GX 333.

Ex. C [GX 4]; Ex. A-6 at
3374:7-16.

Rajaratnam Response: Undisputed.
65. GX 150 includes copies of brokerage account statements
reflecting trading by Galleon hedge funds.
Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.

10

Ex. A-6 at 3395:8-9.

66. GX 100-D reflects internal order management system data
maintained by Galleon concerning, among other things, its
purchase and sales of Intel securities.

Ex. A-6 at 3361:173362:21.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
67. The manager codes included on GX 100-D include manager
codes indicative of trades ordered by Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.
68. GX 308-310 and GX 333 are order tickets concerning
Galleon’s trades concerning Intel stock.

Ex. A-6 at 2567:8-11;
4699:21-4700:22; Ex. S
[GX 78].

Ex. NNNN [S2].

Rajaratnam Response: No dispute as to content of exhibits
but content is immaterial because of collateral estoppel.
69. Rajaratnam caused the Galleon Tech fund to sell short
150,000 shares of Intel on April 10, 2007.

Ex. C [GX 4].

Rajaratnam Response: Immaterial because of collateral
estoppel.
70. On April 12, 2007, Lenke learned information regarding
Intel’s outlook, including “good news” about gross margins,
which was “a very important driver of Intel’s stock price.”

Ex. A-6 at 937:10-941:14;
Ex. BBB [GX 1072].

Rajaratnam Response: Immaterial because of collateral
estoppel.
71. Lenke spoke with Goel about the earnings on April 12 or 13,
and he had a specific recollection of also speaking with Goel on
Monday, April 16, 2007.
Rajaratnam Response: Immaterial because of collateral
estoppel.

11

Ex. A-6 at 941:15-945:24.

72. On April 13, 2007, two telephone calls lasting a total of 11
minutes were placed from a line subscribed to Goel to a line
subscribed to Lenke, including a 10 minute call beginning at 3:11
p.m.

Ex. A [GX 2]; Ex. A-6 at
3376:3-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
73. On April 13, 2007 at 3:21 p.m., a telephone call lasting three
minutes was placed from a line subscribed to Goel to a line
subscribed to Rajaratnam.

Ex. A [GX 2]; Ex. A-6 at
3376:17-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
74. On April 13, 2007, five minutes after his call with Goel,
Rajaratnam caused the Galleon Tech fund to begin to cover its
short position in Intel by buying 500,000 shares of Intel.

Exs. A, C [GX 2, 4]; Ex. A6 at 3376:24-3377:9.

Rajaratnam Response: Immaterial because of collateral
estoppel.
75. During the April 16, 2007 conversation, Lenke provided Goel Ex. A-6 at 943:24-944:24.
with information about earnings and “told [Goel] this made him
an insider.”
Rajaratnam Response: Immaterial because of collateral
estoppel.
76. On April 16, 2007, a total of six calls lasting a total of nine
minutes were placed between lines subscribed to Goel and lines
subscribed to Rajaratnam.

Ex. A [GX 2]; Ex. A-6 at
3378:19-3379:17.

Rajaratnam Response: Immaterial because of collateral
estoppel.
77. On April 16, 2007 at 1:44 p.m., a call lasting two minutes
was placed from a line subscribed to Rajaratnam to a line
subscribed to Horowitz.
Rajaratnam Response: Immaterial because of collateral
estoppel.

12

Ex. A [GX 2]; Ex. A-6 at
3379:17-19.

78. On April 16, 2007, Rajaratnam caused the Galleon Tech fund
to cover its 650,000 short position in Intel and to buy an
additional 500,000 shares.

Ex. C [GX 4]; Ex. A-6 at
3379:20-3380:11.

Rajaratnam Response: Immaterial because of collateral
estoppel.
79. On April 17, 2007, Rajaratnam caused the Galleon Tech and
Diversified funds to purchase an additional 1,479,044 shares of
Intel.

Exs. C, D [GX 4, 5]; Ex. A6 at 3381:21-3382:7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
80. After Intel announced its first quarter results on April 17,
2007, its stock price went up.
Rajaratnam Response: Immaterial because of collateral
estoppel.

Ex. A-6 at 3382:8-15;
Exs. 0000, PPPP [GX 118,
1077].

81. The Galleon funds combined profit and loss avoidance on the
above trades equaled $2,481,271, consisting of profits of
$1,598,356 and avoided losses of $882,915.

Ex. A-6 at 3385:143388:11; Ex. E [GX 6].

Rajaratnam Response: Disputes amount and calculation
method, and asserts that correct method is set forth in
Declaration of Gregg A. Jarrell, Ph.D.

Opp. Ex. B.

82. GX 6 is a summary chart that reflects Galleon Tech and
Diversified profit and loss avoidance from trading Intel Stock
from April 13 through April 17, 2007.

Ex. E [GX 6]; Ex. A-6 at
3385:14-20.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
83. Agent Barnacle verified the accuracy of the profit
information represented in GX 6 by reference to Galleon’s
brokerage statements.
Rajaratnam Response: Undisputed.

13

Ex. A-6 at 3374:7-16.

84. The $1,598,356 in Intel profits were calculated by Agent
Barnacle by calculating the difference between the amount paid
for the shares, and the price at which they were sold.

Ex. A-6 at 3386:18-3387:19.

Rajaratnam Response: Undisputed.
85. Agent Barnacle calculated the $882,915 loss avoidance by
calculating the difference between what the Intel shares were
actually sold at and the opening price for Intel shares of common
stock on the first trading day after April 17, 2007, the date of the
announcement.

Ex. A-6 at 3387:20-3388:11.

Rajaratnam Response: Undisputed.
86. In calculating realized profits, Agent Barnacle calculated the
difference between the purchase price for any given share
purchase and the subsequent sale price.

Ex. A-6 at 3386:14-3387;
3511:3-8.

Rajaratnam Response: Undisputed.
87. In calculating profits on short sales, Agent Barnacle
calculated the difference between the price at which any given
share was sold, and the price at which covering shares were
purchased.

Ex. A-6 at 3511:18-24).

Rajaratnam Response: Undisputed.
88. In calculating insider trading losses avoided (in anticipation
of negative announcements), Agent Barnacle calculated the
difference between the amount realized in closing a given share
position and the value that such position would have had after
public dissemination of the relevant news.

Ex. A-6 at 3511-3512.

Rajaratnam Response: Undisputed.
89. In calculating realized profits and losses avoided, Agent
Barnacle netted purchases and sales of shares against one another
on a first in, first out, or FIFO, basis.
Rajaratnam Response: Undisputed.

14

Ex. A-6 at 3387:4-19.

90. The S2 Indictment charged Rajaratnam with securities fraud
on the basis that he caused the Galleon Tech and/or Diversified
funds to execute transactions in the securities of Clearwire
Corporation (“Clearwire”) on the basis of material, nonpublic
information.

Ex. A-4 ¶ 36-37 (Counts Six
and Seven).

Rajaratnam Response: Undisputed.
91. The S2 Indictment charged that Rajaratnam caused the
Galleon Tech fund to purchase 125,800 shares of Clearwire
common stock on approximately March 24, 2008 on the basis of
material, nonpublic information.

Ex. A-4 ¶ 37 (Count Six).

Rajaratnam Response: Undisputed.
92. The S2 Indictment charged that Rajaratnam caused the
Galleon Tech fund to purchase 136,000 shares of Clearwire
common stock on approximately March 25, 2008 on the basis of
material, nonpublic information.

Ex. A-4 ¶ 37 (Count Seven).

Rajaratnam Response: Undisputed.
93. Clearwire builds and operates wireless broadband networks
in the United States and elsewhere, is headquartered in
Washington state, and is publicly traded.

Ex. A-7, ¶ 27.

Rajaratnam Response: Undisputed.
94. In 2008, Goel shared with Rajaratnam information about a
strategic investment that Intel was going to make in Clearwire.

Ex. A-6 at 1568:22-1569:2.

Rajaratnam Response: Immaterial because of collateral
estoppel.
95. Goel learned confidential information about the Clearwire
deal from a colleague of his, Sriram Viswanathan.
Rajaratnam Response: Immaterial because of collateral
estoppel.

15

Ex. A-6 at 1570:15-20;
1916:23-1917:1.

96. In March 2008, Viswanathan headed the mobility investment
group for Intel Capital and was also the vice president for the
WiMAX program office for Intel.

Ex. A-6 at 1914:25-1915:2.

Rajaratnam Response: Immaterial because of collateral
estoppel.
97. In March 2008, Viswanathan was working on the Clearwire
deal.

Ex. A-6 at 1915:2-3.

Rajaratnam Response: Immaterial because of collateral
estoppel.
98. Goel also learned about the deal because there was general
“buzz” and excitement within Intel about the deal since it was a
large transaction for Intel Capital.

Ex. A-6 at 1570:21- 1571:6;
1912:14-20.

Rajaratnam Response: Immaterial because of collateral
estoppel.
99. Goel knew the information about the Clearwire deal was
confidential because Intel had not made any formal
announcements or issued any press releases about the deal.

Ex. A-6 at 1571:16-21.

Rajaratnam Response: Immaterial because of collateral
estoppel.
100. Goel was not authorized to disclose information about the
Clearwire deal to anyone outside Intel, including Galleon.

Ex. A-6 at 1341:19-25.

Rajaratnam Response: Immaterial because of collateral
estoppel.
101. On March 19, 2008, Goel and Rajaratnam discussed the
Clearwire deal by telephone.
Rajaratnam Response: Immaterial because of collateral
estoppel.

16

Ex. Z [GX 502-T]; Ex. A-6
at 1913:13-1915:24.

102. Goel also spoke with Rajaratnam about the Clearwire deal
prior to March 19, 2008.

Ex. A-6 at 1916:15-22.

Rajaratnam Response: Immaterial because of collateral
estoppel.
103. On the evening of March 20, 2008, Goel and Rajaratnam
again discussed the Clearwire deal.
Rajaratnam Response: Immaterial because of collateral
estoppel.
104. Rajaratnam and Goel discussed how to value the new
Clearwire entity based on certain, specific information regarding
the deal, including that Intel would invest $1 billion and receive
10 percent of the new entity.

Exs. AA, BB, CC [GX 503T, 504-T, 505-T]; Ex. A-6 at
1920:3-1952:2.

Ex. AA [GX 503-T]; Ex. A6 at 1922:22-1924:12.

Rajaratnam Response: Immaterial because of collateral
estoppel.
105. On a subsequent call between Goel and Rajaratnam on
March 20, 2008, Goel informed Rajaratnam that the Intel board
had approved the Clearwire deal the previous day.

Ex. BB [GX 504-T].

Rajaratnam Response: Immaterial because of collateral
estoppel.
106. The information that Rajaratnam and Goel discussed on the
March 20 calls about the Clearwire deal was confidential.
Rajaratnam Response: Immaterial because of collateral
estoppel.

17

Ex. A-6 at 1342-47; 1920:31935:3; 1943:8-1945:15;
1949:6-1952:2.

107. On the next trading day, March 24, 2008, Rajaratnam caused
the Galleon Tech funds to purchase 185,000 shares of Clearwire
stock.

Ex. G [GX 9]; Ex. A-6 at
3394:19-3395:23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
108. Rajaratnam caused the Galleon Tech funds to purchase
200,000 shares of Clearwire stock on March 25, 2008.

Ex. G [GX 9]; Ex. A-6 at
3394:19-3395:23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
109. GX 9 is a summary chart that reflects trading by
Rajaratnam’s manager code “TMT” in Clearwire Securities
allocated to Galleon Tech funds on March 24, 2008 and
March 25, 2008.

Ex. G [GX 9]; Ex. A-6 at
3394:19-3395:23.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
110. The information in GX 9 was verified by Agent Barncale by
reference to GX 150, 100-J, 342, 343, 344, and 345.

Ex. G [GX 9].

Rajaratnam Response: Undisputed.
111. GX 100-J reflects internal order management system data
maintained by Galleon concerning, among other things, its
purchase and sales of Clearwire securities.

Ex. A-6 at 3361:17-3362:21.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
112. The manager codes included on GX 100-J include manager
codes indicative of trades ordered by Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.

18

Ex. A-6 at 2567:8-11;
4699:21-4700:22; Ex. S
[GX 78].

113. GX 342-345 are order tickets concerning Galleon’s trades in Ex. NNNN [S2].
Clearwire stock.
Rajaratnam Response: No dispute as to content of exhibits
but content is immaterial because of collateral estoppel.
114. Goel and Rajaratnam again discussed the status of the
Clearwire deal on April 1, 2008.

Ex. DD [GX 514-T-R];
Ex. A-6 at 1962:10-1965:1.

Rajaratnam Response: Immaterial because of collateral
estoppel.
115. Goel and Rajaratnam again discussed the status of the
Clearwire deal on April 15, 2008.

Ex. EE [GX 519-T]; Ex. A6 at 1966:21-1967:13.

Rajaratnam Response: Immaterial because of collateral
estoppel.
116. Goel shared information about the Clearwire deal with
Rajaratnam because they were good friends.

Ex. A-6 at 1575:24-1576:3.

Rajaratnam Response: Immaterial because of collateral
estoppel.
117. Intel’s investment in the Clearwire deal was publicly
announced on May 7, 2008, approximately six weeks after the
charged trades.

Ex. OOO [GX 1152].

Rajaratnam Response: Immaterial because of collateral
estoppel.
118. Overall, the Galleon Tech funds realized illicit gains of
$851,724 on their Clearwire trading described above.

Ex. A-6 at 3396:2-10; Ex. H
[GX 12].

Rajaratnam Response: Disputes amount and calculation
method, and asserts that correct method is set forth in
Declaration of Gregg A. Jarrell, Ph.D.

Opp. Ex. B.

119. GX 12 is a summary chart that reflects Galleon Tech profit
from purchases of Clearwire Stock on March 24 and 25, 2008.

Ex. A-6 at 3396:2-7; Ex. H
[GX 12].

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.

19

120. Agent Barnacle calculated profit information represented in
GX 12 by reference to Galleon’s brokerage statements.

Ex. A-6 at 3394:1-3396:7.

Rajaratnam Response: Undisputed.
121. The S2 Indictment charged Rajaratnam with securities fraud
on the basis that he executed transactions in the securities of
PeopleSupport on the basis of material, nonpublic information he
obtained from a source at PeopleSupport.

Ex. A-4 ¶¶ 36-37 (Counts
Eleven and Twelve).

Rajaratnam Response: Undisputed.
122. The S2 Indictment charged that Rajaratnam purchased
15,000 shares of PeopleSupport common stock on approximately
July 28, 2008 on the basis of material, nonpublic information.

Ex. A-4 ¶ 37 (Count
Eleven).

Rajaratnam Response: Undisputed.
123. The S2 Indictment charged that Rajaratnam purchased
30,000 shares of PeopleSupport common stock on approximately
October 7, 2008 on the basis of material, nonpublic information.

Ex. A-4 If 37 (Count
Twelve).

Rajaratnam Response: Undisputed.
124. From 2005 to 2009, Rajaratnam traded in a brokerage
account that belonged to Goel.

Ex. A-6 at 1607:16-22.

Rajaratnam Response: Immaterial because of collateral
estoppel.
125. PeopleSupport was a company that performed outsourcing
work for other businesses.

Ex. A-6 at 1028:19-20.

Rajaratnam Response: Immaterial because of collateral
estoppel.
126. PeopleSupport handled call center work for its clients,
Ex. A-6 at 1028:21-24.
meaning that it took customer service calls on behalf of its clients.
Rajaratnam Response: Immaterial because of collateral
estoppel.

20

127. PeopleSupport became a public company in 2004.

Ex. A-6 at 1029:6-7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
128. At one point, Galleon was PeopleSupport’s largest public
investor.

Ex. A-6 at 1030:9-10.

Rajaratnam Response: Immaterial because of collateral
estoppel.
129. Galleon and PeopleSupport reached an agreement whereby
Galleon could suggest a member for PeopleSupport’s board of
directors.

Ex. A-6 at 1030:14-17.

Rajaratnam Response: Immaterial because of collateral
estoppel.
130. Galleon reached the agreement with PeopleSupport in early
2008.

Ex. A-6 at 1031:11-13;
Ex. CCC [GX 1100].

Rajaratnam Response: Immaterial because of collateral
estoppel.
131. Galleon’s designee for the PeopleSupport board was Krish
Panu.
Rajaratnam Response: Immaterial because of collateral
estoppel.
132. Panu sat on PeopleSupport’s board for most of 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.
133. Panu executed a non-disclosure agreement with
PeopleSupport.
Rajaratnam Response: Immaterial because of collateral
estoppel.

21

Ex. A-6 at 1031:14-16;
Exs. CCC, DDD [GX 1100,
1101].

Ex. A-6 at 1036:1-7;
Ex. DDD [GX 1101].

Ex. A-6 at 1038:21-1039:1;
1162:11-1163:2; Ex. EEE
[GX 1102].

134. The agreement required Panu to keep PeopleSupport
information confidential.
Rajaratnam Response: Immaterial because of collateral
estoppel.
135. The agreement provided that if Panu disclosed any
PeopleSupport confidential information, he could do so only to
those who needed to know the information to evaluate a proposed
transaction provided that the persons to whom he disclosed the
information were also bound by the confidentiality restrictions of
the agreement.

Ex. A-6 at 1039:8-24;
1163:3-1164:2; Ex. EEE
[GX 1102].

Ex. A-6 at 1039:251040:18; Ex. EEE
[GX 1102].

Rajaratnam Response: Immaterial because of collateral
estoppel.
136. As a member of PeopleSupport’s board of directors, Panu
had access to all information that was shared with the board of
directors, including confidential information.

Ex. A-6 at 1041:11-17.

Rajaratnam Response: Immaterial because of collateral
estoppel.
137. PeopleSupport had an insider trading policy in 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.
138. The policy prohibited PeopleSupport employees who had
material non-public information about PeopleSupport from
buying or selling securities of the company, or engaging in any
other action to take advantage of or pass on to others that
information.

Ex. MMM [GX 1128];
Ex. A-6 at 1043:4-1046:10.

Ex. MMM [GX1128];
Ex. A-6 at 1044:20-1045:5.

Rajaratnam Response: Immaterial because of collateral
estoppel.
139. In 2008, there were discussions at the board level of
PeopleSupport regarding potentially selling the company to
another company.
Rajaratnam Response: Immaterial because of collateral
estoppel.
`

22

Ex. A-6 at 1046:12-15.

140. In May 2008, PeopleSupport began to engage in talks with
other companies about being acquired.

Ex. A-6 at 1055:4-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
141. PeopleSupport board members learned about these talks.

Ex. A-6 at 1055:24-1056:1.

Rajaratnam Response: Immaterial because of collateral
estoppel.
142. The board members could not disclose information about
PeopleSupport potentially being acquired, per the PeopleSupport
insider trading policy.

Ex. A-6 at 1056:2-6.

Rajaratnam Response: Immaterial because of collateral
estoppel.
143. Aegis, a division of an Indian company called the Essar
Group, became the focus of talks about acquiring PeopleSupport.

Ex. A-6 at 1055:14-18;
1056:7-13.

Rajaratnam Response: Immaterial because of collateral
estoppel.
144. PeopleSupport and Aegis engaged in confidential
negotiations and discussions in 2008.

Ex. A-6 at 1057:4-17.

Rajaratnam Response: Immaterial because of collateral
estoppel.
145. On June 30, 2008, Panu received an email with a
presentation to the PeopleSupport board indicating that the board
had chosen to undertake a review of a potential sale of the
company.

Ex. A-6 at 1061:161062:23; Exs. FFF, GGG
[GX 1106, 1107].

Rajaratnam Response: Immaterial because of collateral
estoppel.
146. PeopleSupport held a meeting of the board of directors on
June 30, 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.

23

Ex. HHH [GX 1108];
Ex. A-6 at 1064:4-16.

147. Panu attended the meeting.

Ex. A-6 at 1064:17-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
148. The board discussed a potential acquisition by the Essar
Group.

Ex. A-6 at 1064:19-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
149. On June 30, 2008, a total of four telephone calls lasting a
total of 14 minutes were placed from a line subscribed to Panu to
a line subscribed to Rajaratnam.

Ex. I [GX 14]; Ex. A-6 at
3401:14-3403:23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
150. On July 2, 2008, either Mr. Rajaratnam or someone working Ex. PPP [GX 1278]; Ex. Afor him or at his behest purchased 15,000 shares of PeopleSupport 6 at 1978:25-1979:20;
in Goel’s Charles Schwab account.
3404:1-8.
Rajaratnam Response: Immaterial because of collateral
estoppel.
151. PeopleSupport was headquartered in California.

Ex. A-6 at 1116:23-1117:1.

Rajaratnam Response: Immaterial because of collateral
estoppel.
152. Krish Panu was the head of a Galleon fund based out of
Galleon’s California office.

Ex. A-6 at 2621:16-17.

Rajaratnam Response: Immaterial because of collateral
estoppel.
153. From July 21 to July 25, 2008, a total of five calls lasting a
total of 89 minutes were placed from a line subscribed to
Galleon’s California office to a line subscribed to Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.

24

Ex. I [GX 14]; Ex. A-6 at
3406:19-3407:5.

154. PeopleSupport held a board meeting on July 28, 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.
155. Panu attended the board meeting.
Rajaratnam Response: Immaterial because of collateral
estoppel.
156. At the board meeting, details for a deal between
PeopleSupport and Aegis were discussed, including the
anticipated date for signing the deal and announcing it to the
public.

Ex. III [GX 1113]; Ex. A-6
at 1067:6-9.

Ex. III [GX 1113]; Ex. A-6
at 1067:6-11.

Ex. III [GX 1113]; Ex. A-6
at 1068:2-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
157. Panu was obligated to keep this information confidential.

Ex. A-6 at 1069:5-15.

Rajaratnam Response: Immaterial because of collateral
estoppel.
158. On July 28, 2008, a call lasting seven minutes was placed
from a line subscribed to Panu to a line subscribed to Rajaratnam.

Ex. I [GX 14]; Ex. A-6 at
3406:1-9.

Rajaratnam Response: Immaterial because of collateral
estoppel.
159. On July 28, 2008, either Mr. Rajaratnam or someone
working for him or at his behest purchased 15,000 shares of
PeopleSupport in Goel’s Charles Schwab account.
Rajaratnam Response: Immaterial because of collateral
estoppel.

25

Ex. QQQ [GX 1279];
Ex. A-6 at 1979:211981:10; 3406:12-14.

160. On July 30, 2008, Rajaratnam and Goel spoke by telephone.
Rajaratnam Response: Immaterial because of collateral
estoppel.
161. Rajaratnam told Goel that “the Ruias made a firm bid now .
. . [i]n the amount, 12.25.”

Ex. GG [GX 539-T]; Ex. A6 at 1983:25-1986:21.

Ex. GG [GX 539-T at 2:3741].

Rajaratnam Response: Immaterial because of collateral
estoppel.
162. The Ruias were the chairman and vice chairman and
principal owners of the Essar Group.

Ex. A-6 at 1075:3-7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
163. The information that Rajaratnam disclosed to Goel was
confidential.

Ex. A-6 at 1176:2-5.

Rajaratnam Response: Immaterial because of collateral
estoppel.
164. No one on the PeopleSupport board of directors could trade
based on that information or provide it to someone at Galleon so
that Galleon could trade on it.

Ex. A-6 at 1176:6-1177:8.

Rajaratnam Response: Immaterial because of collateral
estoppel.
165. The deal between PeopleSupport and Aegis was announced
on August 4, 2008.

Ex. X [GX 117]; Ex. A-6 at
1073:6-20.

Rajaratnam Response: Immaterial because of collateral
estoppel.
166. Goel estimated he made approximately $103,000 from the
sale of the 30,000 PeopleSupport shares on August 11, 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.

26

Ex. A-6 at 1988:10-1989:7.

167. Consistent with Goel’s estimate, Agent Barnacle calculated
Goel’s profits as $102,143.
Rajaratnam Response: Disputes amount and calculation
method, and asserts that correct method is set forth in
Declaration of Gregg A. Jarrell, Ph.D.
168. GX 16 is a summary profit calculation concerning the
PeopleSupport Trading done in Goel’s account in August of
2008.

Ex. A-6 at 3408:10-16;
Exs. J, PPP-RRR [GX 16,
1278-1280].
Opp. Ex. B.
Ex. J [GX 16].

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
169. Agent Barnacle used GX 1278-1280 to verify the accuracy
of GX 16.

Ex. J [GX 16].

Rajaratnam Response: Undisputed.
170. GX 1278-1280 are Goel brokerage account statements for
July and August of 2008.

Exs. PPP-RRR [GX 12781280].

Rajaratnam Response: No dispute as to content of exhibits
but content is immaterial because of collateral estoppel.
171. In October 2008, the Essar Group contacted PeopleSupport
and told PeopleSupport that it needed an extra two weeks to close
the deal between Aegis and PeopleSupport, due to liquidity
problems in the economy.

Ex. A-6 at 1079:19-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
172. PeopleSupport announced this information to the public on
the morning of October 7, 2008, causing its stock price to drop.
Rajaratnam Response: Immaterial because of collateral
estoppel.

27

Ex. A-6 at 1079:25-1080:3;
1092:6-1094:7; Exs. JJJ, Y
[GX 1120, 120].

173. PeopleSupport worked out a revised agreement with the
Essar Group and a revised closing schedule by the end of the day
on October 7, 2008.

Ex. A-6 at 1080:6-11;
1094:8-14; Exs. KKK, NNN
[GX 1121, 1135].

Rajaratnam Response: Immaterial because of collateral
estoppel.
174. All of the information about the trouble closing the deal
with Essar Group was conveyed to the PeopleSupport board of
directors, including Panu.

Ex. A-6 at 1080:12-17;
1089:25-1090:3; 1094:8-14;
Ex. LLL [GX 1127].

Rajaratnam Response: Immaterial because of collateral
estoppel.
175. All of the developments about the trouble closing the deal
Ex. A-6 at 1080:18-1081:3;
with Essar Group that occurred during the day on October 7, 2008 1098:18-1099:9.
were confidential.
Rajaratnam Response: Immaterial because of collateral
estoppel.
176. The following day PeopleSupport’s stock price went back
up.

Ex. A-6 at 1081:6-8; Ex. Y
[GX 120].

Rajaratnam Response: Immaterial because of collateral
estoppel.
177. On October 6, 2008, at least one call lasting at least two
minutes was placed between a line subscribed to Panu and a line
subscribed to Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.

28

Ex. K [GX 17]; Ex. A-6 at
3409:11-3411:4.

178. On October 7, 2008 at 12:27 p.m., a call lasting 10 minutes
was placed from a line subscribed to Galleon to a line subscribed
to Panu.

Ex. K [GX 17]; Ex. A-6 at
3411:16-17.

Rajaratnam Response: Immaterial because of collateral
estoppel.
179. On October 7, 2008, at 1:46 p.m., Rajaratnam and Goel
spoke by phone.

Ex. KK [GX 654-T-G].

Rajaratnam Response: Immaterial because of collateral
estoppel.
180. Rajaratnam told Goel about the delay in PeopleSupport
closing the deal with the Essar Group and said “[w]e know
because one of our guys is on the board.”

Ex. KK [GX 654-T-G at
1:31-43]; Ex. A-6 at
1101:24-1102:25.

Rajaratnam Response: Immaterial because of collateral
estoppel.
181. Rajaratnam also told Goel that he bought shares of
PeopleSupport in Goel’s Charles Schwab account.

Ex. KK [GX 654-T-G at 2];
Ex. A-6 at 1103:11-1105:13.

Rajaratnam Response: Immaterial because of collateral
estoppel.
182. On October 7, 2008, Rajaratnam purchased 30,000 shares of
PeopleSupport in Goel’s Charles Schwab account.
Rajaratnam Response: Immaterial because of collateral
estoppel.
183. Goel estimated he made approximately $50,000 in profit
from the October 9 sale of the 30,000 PeopleSupport shares
purchased on October 7, 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.

29

Ex. A-6 at 1991:151992:16; 3412:16-20;
Exs. L, M, KK, SSS
[GX 18, 19, 654-T-G,
1281].
Ex. A-6 at 1999:8-21.

184. Consistent with Goel’s estimate, Agent Barnacle calculated
Goel’s profit as $49,806.

Ex. A-6 at 3412:14-3413:6;
Exs. L, M [GX 18, 19].

Rajaratnam Response: Disputes amount and calculation
method, and asserts that correct method is set forth in
Declaration of Gregg A. Jarrell, Ph.D.

Opp. Ex. B.

185. GX 19 is a summary profit calculation concerning Rajiv
Goel’s PeopleSupport Trading.

Ex. M [GX 19].

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
186. Agent Barnacle used GX 1281 and 1282 to verify the
accuracy of the information in GX 19.

Ex. M [GX 19].

Rajaratnam Response: Undisputed.
187. GX 1281 and GX 1282 are Goel’s October 2008 brokerage
account statements.

Exs. SSS, TTT [GX 1281,
1282].

Rajaratnam Response: No dispute as to content of exhibits
but content is immaterial because of collateral estoppel.
188. The S2 Indictment charged Rajaratnam with securities fraud
on the basis that he caused the Galleon Tech and/or Diversified
funds to execute transactions in the securities of Akamai on the
basis of material, nonpublic information he obtained from
Danielle Chiesi.

Ex. A-4 ¶¶ 36-37 (Counts
Eight, Nine and Ten).

Rajaratnam Response: Undisputed.
189. The S2 Indictment charged that Rajaratnam caused the
Galleon Tech fund to sell short 138,550 shares of Akamai
common stock on approximately July 25, 2008 on the basis of
material, nonpublic information.
Rajaratnam Response: Undisputed.

30

Ex. A-4 ¶ 37 (Count Eight).

190. The S2 Indictment charged that Rajaratnam caused the
Galleon Tech fund to sell short 173,300 shares of Akamai
common stock on approximately July 29, 2008 on the basis of
material, nonpublic information.

Ex. A-4 ¶ 37 (Count Nine).

Rajaratnam Response: Undisputed.
191. The S2 Indictment charged that Rajaratnam caused the
Galleon Tech fund to sell short 86,650 shares of Akamai common
stock and to sell 1,400 Akamai put options on approximately
July 30, 2008 on the basis of material, nonpublic information.

Ex. A-4 ¶ 37 (Count Ten).

Rajaratnam Response: Undisputed.
192. Akamai Technology is a company that accelerates content
and application delivery over the internet.

Ex. A-6 at 3217:14-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
193. Akamai is a public company.

Ex. A-6 at 3218:2-3.

Rajaratnam Response: Immaterial because of collateral
estoppel.
194. Prior to the time that Akamai reports earnings results to the
public, they are confidential.

Ex. A-6 at 3218:16-19.

Rajaratnam Response: Immaterial because of collateral
estoppel.
195. Akamai has a code of conduct that prohibits employees
from insider trading on material, nonpublic information about
Akamai and selectively disclosing such information to select
individuals or groups.
Rajaratnam Response: Immaterial because of collateral
estoppel.

31

Ex. A-6 at 3218:22-3223:4;
Ex. LLLL [GX 2608].

196. Kieran Taylor was an Akamai employee from at least
November 2005 to late 2009.

Ex. A-6 at 3224:8-15.

Rajaratnam Response: Immaterial because of collateral
estoppel.
197. Taylor received the Akamai code of conduct.
Rajaratnam Response: Immaterial because of collateral
estoppel.
198. In the summer of 2008 Taylor was the senior director of
marketing for Akamai.

Ex. EEEE [GX 2544];
Ex. A-6 at 3223:5-19.

Ex. A-6 at 3224:16-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
199. Taylor was acquainted with Danielle Chiesi.
Rajaratnam Response: Immaterial because of collateral
estoppel.

Exs. FFFF, GGGG
[GX 2545, 2546]; Ex. A-6 at
3225:15-3227:11.

200. In April 2008, Taylor was reminded by his boss at Akamai
about his responsibilities not to give material nonpublic
information to anyone in the investor community.

Ex. A-6 at 3234:4-3237:23;
Exs. HHHH, IIII [GX 2557,
2558].

Rajaratnam Response: Immaterial because of collateral
estoppel.
201. From time to time while he worked at Akamai, Taylor
learned nonpublic financial information about the company.
Rajaratnam Response: Immaterial because of collateral
estoppel.
202. By July 17, 2008, according to a draft earnings call script,
Akamai expected to lower its revenue guidance for 2008.
Rajaratnam Response: Immaterial because of collateral
estoppel.

32

Ex. A-6 at 3225:5-7;
3243:9-3249:6; Ex. KKKK
[GX 2566].

Ex. CCCC [GX 2502 at 10];
Ex. A-6 at 3253:23-3256:13.

203. This information was confidential as of July 17, 2008.

Ex. A-6 at 3256:10-13.

Rajaratnam Response: Immaterial because of collateral
estoppel.
204. During the week of July 23, 2008, Taylor had meetings with
employees of Akamai who knew about the upcoming downward
guidance.
Rajaratnam Response: Immaterial because of collateral
estoppel.
205. On July 24, 2008, a total of three calls lasting a total of
30 minutes were placed between lines subscribed to Chiesi and
lines subscribed to Taylor, including, at 8:52 p.m., a call lasting
15 minutes.

Exs. DDDD, MMMM
[GX 2507, 2614-B]; Ex. A6 at 3260:8-3264:17;
3266:4-3272:8.

Ex. P [GX 39]; Ex. A-6 at
3469:3-19.

Rajaratnam Response: Immaterial because of collateral
estoppel.
206. On July 24, 2008, Chiesi spoke to Rajaratnam by phone at
9:18 p.m.

Ex. FF [532-T].

Rajaratnam Response: Immaterial because of collateral
estoppel.
207. Chiesi told Rajaratnam that Akamai was going to guide
down and that internal people at Akamai expected the company’s
stock price would drop to $25 per share.

Ex. FF [GX 532-T at 1:2643].

Rajaratnam Response: Immaterial because of collateral
estoppel.
208. On July 25, 2008, Rajaratnam caused the Galleon Tech fund
to sell short 200,000 shares of Akamai.
Rajaratnam Response: Immaterial because of collateral
estoppel.

33

Ex. Q [GX 41]; Ex. A-6 at
3471:9-3472:2.

209. GX 41 is a summary chart that reflects Galleon Tech’s
trading in Akamai securities from July 25, 2008 through July 30,
2008.

Ex. A-6 at 3470:7-11;
3471:9-3472:2.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
210. The information in GX 41 was verified by Agent Barnacle
by reference to GX 150; GX 100-F; and GX 103-A.

Ex. Q [GX 41].

Rajaratnam Response: Undisputed.
211. GX 100-F reflects internal order management system data
maintained by Galleon concerning, among other things, its
purchase and sale of Akamai securities.

Ex. A-6 at 3361:17-3362:21.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
212. The manager codes included on GX 100-F include manager
codes indicative of trades ordered by Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.
213. GX 103-A reflects internal order management system data
maintained by Galleon concerning, among other things, its
purchase and sale of Akamai securities.

Ex. A-6 at 2567:8-11;
4699:21-4700:22; Ex. S
[GX 78].

Ex. A-6 at 3361:17-3362:21.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
214. The manager codes included on GX 103-A include manager
codes indicative of trades ordered by Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.
215. On July 29, 2008, Rajaratnam caused the Galleon Tech fund
to sell short 250,000 shares of Akamai.
Rajaratnam Response: Immaterial because of collateral
estoppel.

34

Ex. A-6 at 2567:8-11;
4699:21-4700:22; Ex. S
[GX 78].

Ex. Q [GX 41]; Ex. A-6 at
3471:9-3472:2.

216. On July 30, 2008, Rajaratnam caused the Galleon Tech fund
to sell short 125,000 shares of Akamai.

Ex. Q [GX 41]; Ex. A-6 at
3471:9-3472:2.

Rajaratnam Response: Immaterial because of collateral
estoppel.
217. On July 30, 2008, Rajaratnam caused the Galleon Tech fund
to buy 2,000 Akamai put options.

Ex. Q [GX 41]; Ex. A-6 at
3471:9-3472:2.

Rajaratnam Response: Immaterial because of collateral
estoppel.
218. On July 30, 2008, after the close of trading, Akamai
publicly announced that it was lowering its guidance for 2008.

Ex. A-6 at 3279:10-3280:23;
Ex. JJJJ [GX 2562].

Rajaratnam Response: Immaterial because of collateral
estoppel.
219. Akamai’s share price declined after the announcement.
Rajaratnam Response: Immaterial because of collateral
estoppel.
220. On July 30, 2008, Chiesi spoke to Rajaratnam by phone.

Ex. A-6 at 3281:25-3282:1;
Exs. V, W [GX 116, 116T].

Ex. HH [GX 543-T].

Rajaratnam Response: Immaterial because of collateral
estoppel.
221. Rajaratnam thanked Chiesi.

Ex. HH [GX 543-T at 1:19].

Rajaratnam Response: Immaterial because of collateral
estoppel.
222. On August 27, 2008, Chiesi spoke to Rajaratnam by phone.

Ex. II [GX 594-T-R].

Rajaratnam Response: Immaterial because of collateral
estoppel.
223. Rajaratnam told Chiesi “[o]n Akamai, or IBM, anything, be
radio silent.”
Rajaratnam Response: Immaterial because of collateral
estoppel.

35

Ex. II [GX 594-T-R at 3:45].

224. On September 9, 2008, Chiesi spoke to Taylor by phone.

Ex. LL [GX 698-T].

Rajaratnam Response: Immaterial because of collateral
estoppel.
225. Chiesi and Taylor discussed Akamai and AMD.

Ex. LL [GX 698-T].

Rajaratnam Response: Immaterial because of collateral
estoppel.
226. On September 23, 2008, Chiesi spoke to Rajaratnam by
phone.

Ex. JJ [GX 625-T-R].

Rajaratnam Response: Immaterial because of collateral
estoppel.
227. Rajaratnam told Chiesi, “I must defer to you on IBM.”
Chiesi responded, “And Akamai too.” Rajaratnam responded,
“Akamai too . . . .”

Ex. JJ [GX 625-T-R at 4:1722].

Rajaratnam Response: Immaterial because of collateral
estoppel.
228. On October 10, 2008, Chiesi spoke to Taylor by phone.

Ex. MM [GX 703-T].

Rajaratnam Response: Immaterial because of collateral
estoppel.
229. Taylor told Chiesi that he had a “major present” for her and
that the present was information.

Ex. MM [GX 703-T at 4:3,
11].

Rajaratnam Response: Immaterial because of collateral
estoppel.
230. At the time of the call, Taylor had learned material
nonpublic information about something that Akamai was working
on.
Rajaratnam Response: Immaterial because of collateral
estoppel.

36

Ex. A-6 at 3289:15-3290:20.

231. Overall, the Galleon Tech funds realized illicit gains of
$5,139,851, in connection with the Akamai trading described
above.

Ex. A-6 at 3473:16-25;
Ex. R [GX 44].

Rajaratnam Response: Disputes amount and calculation
method, and asserts that correct method is set forth in
Declaration of Gregg A. Jarrell, Ph.D.

Opp. Ex. B.

232. GX 44 is a summary chart that reflects Galleon Tech profits
from trading in Akamai securities beginning on July 25, 2008.

Ex. A-6 at 3473:16-20;
Ex. R [GX 44].

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
233. GX 44 was verified by Agent Barnacle by reference to
GX 150.

Ex. R [GX 44].

Rajaratnam Response: Undisputed.
234. Agent Barnacle did not include in his profit calculations for
Galleon Tech profits any profits from any pre-existing short
position held by Galleon Tech.

Ex. A-6 at 3473:21-25.

Rajaratnam Response: Undisputed.
235. The S2 Indictment charged Rajaratnam with securities fraud
on the basis that he caused the Galleon Tech and/or Diversified
funds to execute transactions in the securities of ATI from in or
about March 2006 to in or about July 2006 on the basis of
material, nonpublic information.
Rajaratnam Response: Undisputed.

37

Ex. A-4 ¶¶ 38-39 (Count
Thirteen).

236. Anil Kumar worked at McKinsey & Company, an
international management consulting firm, for twenty-three and a
half years, from approximately 1986 to 2009.

Ex. A-6 at 232:11-236:4;
241:6-7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
237. From 2002 to 2008, Kumar worked in McKinsey’s global
outsourcing and offshoring practice, which helped its clients
decide where they should do manufacturing, research and other
functions, and then in McKinsey’s practice on globalization.

Ex. A-6 at 235:15-236:4.

Rajaratnam Response: Immaterial because of collateral
estoppel.
238. McKinsey had a code of professional responsibility that
required its employees to protect the confidentiality of client
information.

Ex. A-6 at 273:4-274:24;
Ex. OO [GX 751].

Rajaratnam Response: Immaterial because of collateral
estoppel.
239. Kumar also signed a confidential information agreement
with McKinsey that he would not make unauthorized disclosures
of confidential client information.

Ex. A-6 at 275:10- 277:7;
Ex. NN [GX 750].

Rajaratnam Response: Immaterial because of collateral
estoppel.
240. AMD is a semiconductor company that makes chips that go
into laptops and PCs.

Ex. A-6 at 280:14-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
241. AMD had an agreement with McKinsey that McKinsey
would keep AMD’s information confidential.
Rajaratnam Response: Immaterial because of collateral
estoppel.

38

Ex. A-6 at 281:11-282:24;
Ex. PP [GX 754].

242. From 2004 to 2009, AMD was a client of Kumar’s.

Ex. A-6 at 287:22-288:15.

Rajaratnam Response: Immaterial because of collateral
estoppel.
243. Kumar met Rajaratnam in business school in approximately
1982.

Ex. A-6 at 250:8-10.

Rajaratnam Response: Immaterial because of collateral
estoppel.
244. From approximately 1983 to 1993, Rajaratnam and Kumar
met once or twice a year.

Ex. A-6 at 251:9-19.

Rajaratnam Response: Immaterial because of collateral
estoppel.
245. Kumar was aware that Rajaratnam founded the Galleon
hedge fund.

Ex. A-6 at 252:7-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
246. From 1999 to 2003, Kumar spoke with Rajaratnam three to
four times a year.

Ex. A-6 at 255:5-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
247. On behalf of McKinsey, Kumar sought to provide services to Ex. A-6 at 257:11-19.
Galleon in 2002.
Rajaratnam Response: Immaterial because of collateral
estoppel.
248. In late 2003, Rajaratnam offered to retain Kumar as a
consultant outside of McKinsey for a half million dollars a year.
Rajaratnam Response: Immaterial because of collateral
estoppel.

39

Ex. A-6 at 263:18-264:9.

249. Kumar agreed to the arrangement after discussions with
Rajaratnam.

Ex. A-6 at 264:17-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
250. Rajaratnam suggested to Kumar to find someone in India
Ex. A-6 at 266:1-4.
who could accept the payments and who could reinvest the money
in Galleon.
Rajaratnam Response: Immaterial because of collateral
estoppel.
251. Kumar found someone who signed the consulting agreement Ex. A-6 at 266:16-18.
with Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.
252. An employee of Rajaratnam set up the entity Pecos Trading
Company with a bank account in Switzerland to receive the
money.

Ex. A-6 at 266:21-267:7.

Rajaratnam Response: Immaterial because of collateral
estoppel.
253. Kumar used the name of his housekeeper, Manju Das, to set
up an off-shore account at Galleon.

Ex. A-6 at 267:12-271:24;
Ex. UUU [GX 2105].

Rajaratnam Response: Immaterial because of collateral
estoppel.
254. In exchange, Rajaratnam asked Kumar to keep track of his
knowledge in the industry and share it with Rajaratnam, and to
keep a list of ideas that Kumar heard and chat with Rajaratnam
about what he had seen once a month or every six weeks.
Rajaratnam Response: Immaterial because of collateral
estoppel.

40

Ex. A-6 at 271:25-272:16.

255. In 2004 and 2005, Kumar received a total of $1.1 to
$1.2 million dollars from Rajaratnam.
Rajaratnam Response: Immaterial because of collateral
estoppel.
256. In or around December 2005, Rajaratnam told Kumar that
Kumar’s advice was not as valuable because Kumar was not able
to get Rajaratnam the detailed quarterly financial results that
Rajaratnam wanted from either AMD or Kumar’s other clients,
and Rajaratnam wanted to move to an arrangement whereby he
monitored the benefit of what Kumar told him.

Ex. A-6 at 283:3-20,
325:22-333:25, 337:3342:10; Exs. QQ, RR, SS,
VVV-BBBB [GX 764, 766,
767, 2119-21251.
Ex. A-6 at 341:18-342:24.

Rajaratnam Response: Immaterial because of collateral
estoppel.
257. In 2006, Kumar told Rajaratnam that he would prefer that at
the end of the year Rajaratnam decide, in Rajaratnam’s judgment,
whether there was any value to Kumar’s information and what to
pay Kumar.

Ex. A-6 at 345:2-12.

Rajaratnam Response: Immaterial because of collateral
estoppel.
258. In September 2005, AMD began to look for a way to partner Ex. A-6 at 346:12-347:2.
with another company that specialized in graphics chips.
Rajaratnam Response: Immaterial because of collateral
estoppel.
259. Kumar signed a non-disclosure agreement with AMD
concerning the prospect of AMD’s partnering with a graphics
chip company.

Ex. A-6 at 347:12-349:20;
Ex. VV [GX 805].

Rajaratnam Response: Immaterial because of collateral
estoppel.
260. ATI was a leading graphics chip company.
Rajaratnam Response: Immaterial because of collateral
estoppel.

41

Ex. A-6 at 345:24-346:5.

261. Kumar told Rajaratnam that AMD was considering
partnering with a graphics company, including potentially ATI.

Ex. A-6 at 350:2-20.

Rajaratnam Response: Immaterial because of collateral
estoppel.
262. By December 2005, McKinsey was proposing to help AMD
approach ATI about a possible combination.

Ex. A-6 at 350:21-353:12;
Ex. YY [GX 846].

Rajaratnam Response: Immaterial because of collateral
estoppel.
263. In late December 2005, AMD opened a dialogue with ATI.
Rajaratnam Response: Immaterial because of collateral
estoppel.
264. Kumar told Rajaratnam that AMD was in early discussions
with ATI.

Ex. A-6 at 354:9-10;
Ex. WW [GX 809].

Ex. A-6 at 354:21-355:3.

Rajaratnam Response: Immaterial because of collateral
estoppel.
265. Kumar told Rajaratnam that a potential deal between AMD
and ATI should not be discussed with anyone.

Ex. A-6 at 355:4-9.

Rajaratnam Response: Immaterial because of collateral
estoppel.
266. From September 2005 to July 2006, Kumar spoke to
Rajaratnam about the AMD/ATI deal approximately once a
month.

Ex. A-6 at 356:9-357:1;
362:11-15.

Rajaratnam Response: Immaterial because of collateral
estoppel.
267. Kumar updated Rajaratnam about the potential timing for
the deal.
Rajaratnam Response: Immaterial because of collateral
estoppel.

42

Ex. A-6 at 360:23-361:15.

268. Kumar told Rajaratnam when the deal became fifty percent
certain.

Ex. A-6 at 362:16-362:24.

Rajaratnam Response: Immaterial because of collateral
estoppel.
269. Kumar told Rajaratnam that AMD was going to pay more
than $20 per share for ATI.

Ex. A-6 at 366:19-367:1.

Rajaratnam Response: Immaterial because of collateral
estoppel.
270. In May 2006, Kumar told Rajaratnam that AMD’s
Ex. A-6 at 373:15-374:4.
management was very keen to do the deal and had a lot of latitude
as to how much AMD could pay for ATI.
Rajaratnam Response: Immaterial because of collateral
estoppel.
271. The deal between ATI and AMD was publicly announced
on July 24, 2006.

Ex. A-6 at 384:24-386:6;
Ex. UU [GX 801].

Rajaratnam Response: Immaterial because of collateral
estoppel.
272. After the deal was announced, ATI’s stock price rose from
roughly $16 to just under $20.

Ex. U [GX 110]; Ex. A-6 at
386:7-387:6.

Rajaratnam Response: Immaterial because of collateral
estoppel.
273. After the deal was announced, Kumar spoke to Rajaratnam,
and Rajaratnam thanked him, saying “That was fantastic. We are
all cheering you right now.”

Ex. A-6 at 387:7-16.

Rajaratnam Response: Immaterial because of collateral
estoppel.
274. After Thanksgiving 2006, Rajaratnam told Kumar that he
was going to give him $1 million.
Rajaratnam Response: Immaterial because of collateral
estoppel.

43

Ex. A-6 at 387:17-388:3.

275. Kumar asked Rajaratnam to send the money to an account
that Kumar maintained in an Indian bank, which Rajaratnam did.

Ex. A-6 at 389:8-391:15;
Ex. TT [GX 772].

Rajaratnam Response: Immaterial because of collateral
estoppel.
276. Kumar believed that Rajaratnam paid him $1 million
because Kumar told him about the ATI deal.

Ex. A-6 at 907:3-5.

Rajaratnam Response: Immaterial because of collateral
estoppel.
277. In 2006, Adam Smith was a portfolio manager at Galleon.

Ex. A-6 at 2443:15-23.

Rajaratnam Response: Immaterial because of collateral
estoppel.
278. In 2006, Kamal Ahmed was an investment banker with
Morgan Stanley covering semiconductor companies.

Ex. A-6 at 1856:7-13,
2573:7-8.

Rajaratnam Response: Immaterial because of collateral
estoppel.
279. In May 2006, Smith spoke with Ahmed, and Ahmed told
Smith that there was a deal underway for AMD to purchase ATI.

Ex. A-6 at 2573:9-2574:2.

Rajaratnam Response: Immaterial because of collateral
estoppel.
280. Smith knew that Ahmed was a senior banker in the
semiconductor area and that Ahmed was likely to have
knowledge of the deal even if he was not directly involved in it.

Ex. A-6 at 2574:9-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
281. Smith knew that Ahmed was not authorized to tell Smith
about the AMD/ATI deal.
Rajaratnam Response: Immaterial because of collateral
estoppel.

44

Ex. A-6 at 2576:7-10.

282. Smith had worked at Morgan Stanley and knew that Morgan
Stanley’s code of conduct instructed employees not to
communicate information like the information about the
AMD/ATI deal outside the company, and that this information
was material, non-public information because it related to an
impending merger.

Ex. A-6 at 2576:11-18.

Rajaratnam Response: Immaterial because of collateral
estoppel.
283. After Smith spoke to Ahmed, Smith told Rajaratnam that
Smith had met with Ahmed and heard about the ATI/AMD deal.

Ex. A-6 at 2580:15-2581:5.

Rajaratnam Response: Immaterial because of collateral
estoppel.
284. Rajaratnam purchased shares of ATI in March 2006.
Rajaratnam Response: Immaterial because of collateral
estoppel.
285. GX 20-R is a summary chart indicating Galleon Tech and
Diversified daily closing positions in ATI technologies stock
from January 1, 2006 through July 28, 2006.

Ex. A-6 at 3416:9-11; Ex. N
[GX 20-R].

Ex. A-6 at 3414:4-20;
5136:20-5137:14.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
286. Rajaratnam took a position as large as 3.4 million shares in
ATI in March 2006.

Ex. A-6 at 3416:12-16;
Ex. QQQQ [GX 20].

Rajaratnam Response: Immaterial because of collateral
estoppel.
287. In mid-May 2006, Rajaratnam held a position of just under
4 million shares of ATI.
Rajaratnam Response: Immaterial because of collateral
estoppel.

45

Ex. A-6 at 3422:14-18;
Ex. QQQQ [GX 20].

288. By the end of May 2006, Rajaratnam increased his position
in ATI to 5 million shares.

Ex. A-6 at 3423:17-23;
Ex. QQQQ [GX 20].

Rajaratnam Response: Immaterial because of collateral
estoppel.
289. Shortly before July 24, 2006, Rajaratnam held a position of
approximately 5.4 million shares of ATI.

Ex. A-6 at 3424:25-3425:3;
Ex. QQQQ [GX 20].

Rajaratnam Response: Immaterial because of collateral
estoppel.
290. Overall, the Galleon funds realized illicit gains of
$22,938,866 in connection with the ATI trading described above.

Ex. A-6 at 3425:193426:11; Ex. O [GX 21].

Rajaratnam Response: Disputes amount and calculation
method, and asserts that correct method is set forth in
Declaration of Gregg A. Jarrell, Ph.D.

Opp. Ex. B.

291. GX 21 is a summary chart that reflects Galleon Tech and
Diversified profit realized on securities of ATI held at the time of
AMD’s acquisition of ATI on July 24, 2006.

Ex. O [GX 21]; Ex. A-6 at
3426:2-9.

Rajaratnam Response: No dispute as to content of exhibit but
content is immaterial because of collateral estoppel.
292. GX 21 was verified by Agent Barnacle by reference to
GX 150.
Rajaratnam Response: Undisputed.

46

Ex. A-6 at 3374:7-16.

293. Rajartanam created false email trails containing alternative
justifications for trading securities.

Ex. A-6 at 2630-31, 263640.

Rajaratnam Response: Immaterial because of collateral
estoppel.
294. In order to prevent detection, Rajaratnam instructed Smith
and Chiesi to both buy and sell securities when in possession of
inside information to create the false impression of not having
inside information.

Ex. A-6 at 2641-2646; Ex. II
[GX 5940T-R at 2:8-39].

Rajaratnam Response: Immaterial because of collateral
estoppel.
295. On June 7, 2007, Rajaratnam testified before the SEC under
oath.

Ex. RRRR

Rajaratnam Response: Immaterial because of collateral
estoppel.
296. During that testimony, Rajaratnam was asked whether he
had any reason to believe, that AMD was going to acquire ATI
before the announcement.

Ex. RRRR at 114.

Rajaratnam Response: Immaterial because of collateral
estoppel.
297. Rajaratnam replied that he did not.

Ex. RRRR at 114.

Rajaratnam Response: Immaterial because of collateral
estoppel.

RAJ RAJARATNAM’S
COUNTERSTATEMENT OF UNDISPUTED MATERIAL FACTS
UNDISPUTED MATERIAL FACTS

EVIDENTIARY
SUPPORT

1. On October 13, 2011, Judge Holwell sentenced Mr.
Rajaratnam to 11 years in prison, ordered him to forfeit
$53,816,434 in profits in connection with insider trading in a
number of stocks, including the ones at issue in this case and in
the SEC’s Motion, and imposed a criminal fine of $10 million.

Opp. Ex. A, Ex. 1 at 28-29.

47

2. The FIFO method used to calculate the SEC’s disgorgement
number does not attempt to remove other market factors that
affect the stock price and are unrelated to the release of the
material information at issue for a particular stock.

Opp. Ex. B at ¶¶ 12-14.

3. Agent Barnacle “didn’t do an event study” and “didn’t
perform any analysis” to exclude price movements not
attributable to the inside information.

Opp. Ex. A, Ex. 13 at 3551.

4. Agent Barnacle treated “the entire increase in the stock price,
upon the announcement of the news, as insider trading gain.”

Opp. Ex. A, Ex. 13 at 3551.

5. Professor Jarrell performed event studies for all the
transactions at issue in the SEC’s Motion for Partial Summary
Judgment.

Opp. Ex. B at ¶ 23.

6. Event studies use market modeling to determine what portion
of a stock’s price change on a particular day was the result of the
release of material information and what portion was the result of
normal market factors.

Opp. Ex. B at ¶¶ 17-22.

7. Market modeling allows changes due to normal market factors Opp. Ex. B at ¶¶ 17-22.
to be removed, leaving only changes attributable to the release of
the material information.
8. Event studies performed in this case result in total profit for
the trading in Akamai, ATI, Clearwire, Intel (Q1 2007), and
PeopleSupport of $22,300,551.

Opp. Ex. B at ¶ 24.

9. Mr. Rajaratnam’s personal gains came from two sources:
management fees and returns on personal investments in Galleon
funds.

Opp. Ex. C at ¶ 6.

10. As a portfolio manager and a partner in Galleon Management,
L.P., Mr. Rajaratnam was entitled to a portion of the fees Galleon
investors paid for fund management.

Opp. Ex. C at ¶ 6.

11. Mr. Rajaratnam also had direct investments, as well as an
indirect interest through his deferred compensation, in both the
Diversified and Technology Funds.

Opp. Ex. C at ¶ 6.

12. Mr. Rajaratnam’s direct and indirect interests in Galleon
entitled him to a pro rata portion of any profits those funds
generated.

Opp. Ex. C at ¶ 6.

13. Mr. Rajaratnam’s share of Galleon Management’s
management fees was 65% from 2005 to 2007, and 50% in 2008.

Opp. Ex. C at ¶¶ 11-12.

48

14. Mr. Rajaratnam realized a personal pre-tax gain from
management fees attributable to the five stocks at issue equal to
$2,582,808.

Opp. Ex. C at ¶ 13.

15. The return on Mr. Rajaratnam’s direct and indirect
investments in the funds attributable to the stocks at issue during
the relevant periods was $2,142,342.

Opp. Ex. C at ¶ 17.

16. Mr. Rajaratnam’s total personal gain from insider trading in
the fives tocks at issue was $4,725,150.

Opp. Ex. C at ¶ 18.

17. The SEC’s Director of Enforcement submitted a letter to
Judge Holwell in advance of Mr. Rajaratnam’s criminal
sentencing.

Opp. Ex. A, Ex. 3.

Dated: October 17, 2011
New York, New York
Respectfully submitted by:
/s/ Terence J. Lynam_______________
John M. Dowd (admitted pro hac vice)
Terence J. Lynam (admitted pro hac vice)
William E. White (admitted pro hac vice)
Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Ave, NW
Washington, DC 20036
[phone]
Samidh Guha (SG-5759)
Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
New York, NY 10036
[phone]
Attorneys for Raj Rajaratnam

49