March 17, 2011

The insider trading trial of Raj Rajaratnam, the billionaire founder of the Galleon Group hedge fund, is heating up.

As the trial unfolds in a lower Manhattan courtroom, prosecutors have been playing a series of secretly taped phone conversations made by the FBI.

First there were revelations of love affairs, and more evidence of captains of finance artfully handing over information so that they and others could profit from it.

Now, in what is emerging as Wall Street's very own version of WikiLeaks, the tapes have also revealed what some high-flying executives really think of their colleagues.

As reported in the New York Times, a hedge-fund trader calls his colleague "a little dirty" and speaks of trying to "pump information out of my friend."

Two associates mock a third for wanting to join a "billionaire circle." A former Goldman Sachs director calls his fellow board members an "opportunistic group." Then they all keep doing business together.

Ok, there have been no truly hair-raising comments yet. (Then again, WikiLeaks didn't offer any huge diplomatic no-no's either.) Still, the trial is only in its second week. And it looks like things might soon get even spicier.

From the New York Times:

"In today's world with WikiLeaks and the Internet, just assume nothing is private--even the phone, said Barbara Pachter, a New Jersey-based etiquette specialist who urges people to avoid bad-mouthing others.

Anil Kumar, a former McKinsey & Co. consultant and a star government witness, grinned briefly on the witness stand as prosecutors played a tape in which Mr. Rajaratnam, his old business-schoolmate, and another associate, then-Goldman director Rajat Gupta, talked about him.

During the July 29, 2008, call, Messrs. Rajaratnam and Gupta deride Mr. Kumar's aptitude for doing investment deals. "I'm getting a feeling that he's trying to, just...be a mini-Rajat, right?" Mr. Rajaratnam says on the tape. "Without bringing anything new to the party, right?" "Yeah, yeah," says Mr. Gupta, who previously oversaw Mr. Kumar as managing director at McKinsey.

ABOUT THE AUTHOR
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in ...