Circle of Friends (47 page)

150
   How Franklin-Babcock-Guttenberg circle led to David Slaine from author interviews, and various news accounts, including Zachery Kouwe, “In Insider Trading Inquiry, Old and New Cases Linked,”
New York Times
, February 3, 2010.

151
   Slaine's net worth from the motion to dismiss insider trading charges filed by Zvi Goffer.

152
   Background on FBI agent David Makol from author interviews and various news accounts, including Susan Pulliam, Michael Rothfeld, and Jenny Stresburg, “The FBI Agent Who ‘Flips' Insider-Trading Witnesses,”
Wall Street Journal
, January 20, 2012.

155
   Sentencing guidelines for insider trading and rape from Matt Levine, “How Much Time In Jail Will a Little Bit of Insider Trading Cost You,” Dealbreaker, September 12, 2011, and New York Defense Lawyer.com.

156
   Slaine as informant from Susan Pulliam, “Wired on Wall Street: Trader Betrays a Friend,”
Wall Street Journal
, January 16, 2010.

CHAPTER 8: THE FEDS MIGHT BE LISTENING

160
   Slaine telling the FBI about a tip about an analyst downgrade of Ama​zon.com from David Glovin and David Voreacos, “Dream Insider Informant Led FBI From Galleon to SAC,” Bloomberg, December 3, 2012.

161
   FBI's belief SEC would mess up its cases from James Stewart,
Den of Thieves
(New York: Simon & Schuster, 1991), and James B. Stewart and Daniel Hertzberg, “Siegel: American Dream Gone Bad,”
Wall Street Journal
, February 22, 1987.

161
   Details about Roomy Khan's cooperation with FBI agent B. J. Kang from author interviews with government officials, court documents, and Chad Bray, “Insider Informant, Some Tips Were Refused,”
Wall Street Journal
, August 8, 2012.

162
   Doug Whitman's advice to Roomy Khan from Kaja Whitehouse, “What value do you have if you're not a slimeball?”
New York Post
, August 9, 2012.

162
   Roomy Khan's relationship with Deep Shah from Susan Pulliam, “Galleon Sinks; Informant Surfaces,”
Wall Street Journal
, and author interviews.

162
   Roomy Khan's various lies to federal investigators from author interviews, various news accounts, and court documents.

169
   Details of Slaine's foray as an informant, including New York City meeting places, from author interviews and various news accounts, including David Glovin and David Voreacos, “Dream Insider Informant Led FBI From Galleon to SAC,” Bloomberg, December 3, 2012.

170
   Details of Makol working with Slaine and Slaine leading FBI to Drimal's 3Com trade from author interviews and various news accounts, including Pulliam, “Wired on Wall Street.”

170
   Timeline on the 3Com trade and the various players in the Zvi Goffer circle of friends from Kevin McCoy and Laura Petrecca, “Today ‘Octopussy' among 14 facing charges for insider trading,”
USA Today
, November 6, 2009.

172
   Conversations between Zvi Goffer, Michael Kimelman, and Slaine from government's sentencing memorandum re: David Slaine.

173
   Zvi Goffer as Octopussy and his “you” and “me” cell phones from Tom Hays, “‘Octopussy' Zvi Goffer, 6 Others Plead Not Guilty to Insider Trading Scheme,”
Huffington Post
, February 2, 2010.

CHAPTER 9: ODD COUPLES

175
   Rajaratnam's recorded conversation with Roomy Khan from motion filed by Rajaratnam's lawyers to suppress wiretap evidence.

181
   Background on Sanjay Wadhwa from David Leonard, “The SEC: Outmanned, Outgunned, and on a Roll,”
Bloomberg Businessweek
, April 19, 2012.

182
   Anil Kumar's business relationship with Rajaratnam from George Packer, “A Dirty Business,”
New Yorker
, June 27, 2011.

185
   Danielle Chiesi conversation with Rajaratnam from Katya Wachtel, “AUDIO: Listen to Raj And Danielle Chiesi Revel in Their Trading of Akamai Stock Ahead of a Public Guidance Announcement,” April 5, 2011.

185
   Background on Chiesi from various news accounts, including Packer, “A Dirty Business.”

186
   Slaine telling government investigators that Rajaratnam liked “pretty girls” from author interviews and David Glovin and David Voreacos, “Dream Insider Informant Led FBI from Galleon to SAC,” Bloomberg, December 3, 2012.

187
   Background on Robert Moffat, Chiesi, and Hector Ruiz and how their circle operated from author interviews with law enforcement officials, and published reports, including James Bandler and Doris Burke, “Dangerous Liaisons at IBM: Inside the biggest hedge fund insider-trading ring,”
Fortune
, July 6, 2010.

188
   More detail on Chiesi and how Bear Stearns investigated her trades from author interviews and various news accounts, including Anthony Effinger, Katherine Burton, and Ian King, “Woman Who Sank Galleon Was Beauty-Queen-Turned-Analyst Insider,” Bloomberg, November 22, 2009.

189
   Chiesi's work on AMD Middle Eastern deal from author interviews, Bandler and Burke, “Dangerous Liaisons at IBM,” and various news accounts.

189
   Conversation between Rajaratnam and Chiesi where he urges her to keep quiet from author's review of transcripts and various news accounts, including “Tapes in Rajaratnam Trial Allege Affair, Cover-Up, Third McKinsey Player,” Finalternatives, March 15, 2011.

190
   Chiesi's conversations with Rajaratnam about information she received from Kieran Taylor from various news accounts on tapes played at court hearings and Michael J. de la Merced, “Taped Calls About Akamai Earnings Guidance Heard at Galleon Trial,”
New York Times
, April 4, 2011. Also see Kaja Whitehouse, “Racy Insider Tapes; Ex-Trader Raj Chats Speak Volumes,”
New York Post
, April 5, 2011.

CHAPTER 10: SOMETHING GOOD IS GOING TO HAPPEN

194
   Background on Kumar and Rajaratnam relationship from author interviews, Packer, “A Dirty Business,” and various news accounts, including Peter Lattman and Azam Ahmed, “A Circle of Tipsters Who Shared Illicit Secrets,”
New York Times
, May 11, 2011.

195
   Rajaratnam conversations with Rajat Gupta and background on Gupta from various news accounts, author interviews, and Stephen Grocer, “Rajat Gupta's Career in a Timeline,”
Wall Street Journal
, June 15, 2012. See also Packer, “ A Dirty Business.”

198
   Buffett's “fifteen dollars a second” boast on his Goldman investment made to Liz Claman of the Fox Business Network.

203
   Background on new SEC enforcement chief Robert Khuzami from various news accounts and author interviews with Khuzami.

205
   Choo-Beng Lee's statement to FBI from author interview; how he was caught through Chiesi wiretap from author interview and various news accounts, including Peter Lattman, “Trail to a Hedge Fund, from a Cluster,”
New York Times
, December 5, 2012.

207
   Chiesi worried she might get caught like “Martha fucking Stewart” from Jessica Pressler, “Rajaratnam and Danielle Chiesi Plead Not Guilty to Insider Trading,”
New York Magazine
, December 21, 2009.

207
   Lee's advice to Kang to begin looking at expert networks from author interviews with government investigators and various news accounts.

210
   Rajaratnam's involvement in film project and customs office tipping he might leave the country from author interviews with government investigators and various news accounts, including Jodi Xu, “Galleon's Raj Rajaratnam a No-Show at Film Fest,”
Wall Street Journal
, November 12, 2009. See also Susan Pulliam, “Fund Chief Snared by Taps, Turncoats,”
Wall Street Journal
, December 30, 2009.

210
   Rajaratnam's plan to travel to Geneva from Zachery Kouwe, “Rajaratnam Planned Business Trip Before Arrest,”
New York Times
, October 23, 2009.

CHAPTER 11: POUNCE HARD

213
   Rajaratnam's arrest and FBI interrogation from author interviews with government officials and various news accounts, including most prominently Suketu Mehta, “The Outsider,”
Newsweek
, October, 23, 2011.

215
   Details of Chiesi's arrest from author interviews with government officials and various news accounts.

216
   Details of Drimal's arrest from author interviews and various news accounts, including Susan Pulliam, “When the Feds Are Watching,”
Wall Street Journal
, April 28, 2011.

219
   Details on expert networks and Anthony Longoria from author interviews with government investigators, court documents, and various news accounts, including Patricia Hurtado, “Rajaratnam Arrest Made ex-AMD Worker ‘Paranoid,' He Tells Jury,” Bloomberg, September 14, 2011.

222
   Preet Bharara's speech to the New York City Bar Association from author interviews and various news accounts, including Mark DeCambre, “Taped crusader: U.S. Atty pushes wiretaps, rails vs. insider trading,”
New York Post
, October 22, 2010.

224
   Background on Preet Bharara and his brother, Vinnie, from Bharara speech in June 2011 attended by author, as well as author interviews and Jason Horowitz, “Federal prosecutor Preet Bharara builds a reputation on Wall Street, in Albany,”
The Washington Post
, April 4, 2013, and Peter Lattman, “The Fabulous Bharara Boys,”
New York Times
, June 14, 2011.

CHAPTER 12: NEVER LET A GOOD SCANDAL GO TO WASTE

227
   FBI's growing angst over Preet Bharara's media strategy from interviews with government investigators with direct knowledge of the matter.

232
   Noah Freeman's comments to the FBI about pressure to give Cohen the best information even if it means insider information from author interviews and Patricia Hurtado, “Ex-SAC Capital Manager Tells FBI Fund Used Insider Data,” Bloomberg, Oct. 2, 2012.

232
   Relationship between Noah Freeman and Winifred Jiau and the inner workings of SAC including Freeman's relationship with Cohen from author interviews and various news accounts, including Azam Ahmed and Peter Lattman, “Expert Network Consultant Is Convicted in Insider Trading Case,”
New York Times
, June 20, 2011; Peter Lattman, “Trail to a Hedge Fund, from a Cluster,”
New York Times
, December 5, 2012. See also Kaja Whitehouse, “Beef & lobster source: SAC staff pooh-poohed expert Winnie,”
New York Post
, June 7, 2011.

234
   Jiau's incarceration from author interviews and Walter Pavlo, “Winifred Jiau Prison Sentence: What Is The Message For Wall Street?”
Forbes
, September 13, 2011.

235
   Jon Streeter's view of insider trading from author interviews with government investigators.

238
   Rajaratnam lawyer Dowd's arguments to get wiretaps thrown out of court from author interviews and various news accounts, including Kaja Whitehouse, “Galleon Wiretaps Ruckus,”
New York Post
, October 7, 2010.

240
   Judge Richard Holwell's thought process regarding the wiretap evidence and the advice from his law clerk from author interviews with people who have direct knowledge of the matter.

242
   Holwell's decision to allow wiretaps from author interviews and various news accounts, including Jonathan Stempel, “Galleon's Rajaratnam Loses Wiretap Suppression Bid,” Reuters, November 24, 2010.

243
   Details of FBI meeting with John Hollander from author interview with Hollander's attorney and people who have spoken directly with Hollander.

CHAPTER 13: THE LUCKIEST MEN IN LAW ENFORCEMENT

247
   Jon Streeter's “nightmare” from author interviews with people with direct knowledge of the matter.

248
   Rajaratnam's Goldman trades from various news accounts, including David Glovin, Patricia Hurtado, and Bob Van Voris, “Galleon's Rajaratnam Talked on Tape About Goldman Board,” Bloomberg, March 31, 2011.

251–252
 Rajiv Goel's tapped telephone calls with Rajaratnam from court records and “Wiretaps Captivate Jurors at Galleon Insider Trading Trial,” Associated Press, March 27, 2011.

254
   Cross-examination of Anil Kumar from author interviews and various news accounts, including “Insight: Rajaratnam Lawyer: Information Public, Not Secret,” Thomson Reuters News, March 16, 2011.

256
   Rajaratnam appeal strategy from people with direct knowledge of the matter.

263
   The record of SEC enforcement chief Robert Khuzami from various news accounts, including Ben Protess, “Khuzami, S.E.C. Enforcement Chief Who Reinvigorated Unit, to Step Down,”
New York Times
, January 9, 2013. See also SEC press release, “Enforcement Director Robert Khuzami to Leave,” January 9, 2013.

CHAPTER 14: STEVIE IS WORRIED

268
   George Sard's media strategy from author interviews.

272
   Steve Cohen's remarks during his deposition in the Fairfax Financial case from author's review of the transcript and Jennifer Ablan, “Stevie Cohen Unplugged,” Reuters, December 13, 2011.