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| Deep Shah |
Deep Shah has the distinction of being the sole fugitive from the Galleon Group insider-trading case that features Raj Rajaratnam as its central figure.
Mr. Shah was located in Mumbai, according to the Securities and Exchange Commission. The one-time Moody’s analyst has been charged with selling (for $10,000) inside information to admitted tipster Roomy Khan, a key witness against Rajaratnam. The tip involved the takeover of the Hilton Hotels by the Blackstone Group, and also information regarding Google.
The fraud charges against Mr. Shah stem from late 2009, but Shah had been living in India before the indictment. We know this because the Wall Street Journal interviewed Shah one month before the charges were filed. In the interview, Shah denied wrongdoing. He is the only charged individual who has yet to respond to the charges.
Shah was located in Mumbai, India by a local bailiff, who attempted to serve him with legal papers. Mr. Shah is apparently living in high style on the beach in the Juhu community, but was not found at his home by the bailiff.
"He was not found on my enquiries with his servant," the bailiff said. "I was informed the defendant had gone out and no fixed time to be determined."
Rajaratnam to Testify
Separately, the WSJ reports that Galleon founder Rajaratnam wants to testify on his own behalf at the insider-trading trial that starts today. The final decision will probably rest on whether Rajaratnam feels he needs to respond to the damaging taped phone conversations that are the centerpiece of the prosecution’s case.
Rajaratnam’s appearance on the stand will likely be the center ring of the Galleon three-ring circus of a case, which will likely go on for two months.
Today marks the beginning stages, in which a jury is picked and lawyers deliver opening statements. FBI special agent Diane Wehner and former McKinsey partner Anil Kumar are expected to be the first two witnesses for the prosecution. Kumar has already pleaded guilty to passing along insider tips to Rajaratnam regarding Advanced Micro Devices (AMD).
Two unindicted co-conspirators will play major roles in the trial. The first is Rajat Gupta, former managing partner of McKinsey. The other co-conspirator is Rengan Rajaratnam, Raj’s brother. Neither has been formally charged with any wrongdoing.
Last Friday, Assistant U.S. Attorney Jonathan Streeter argued to the court that
"Mr. Gupta is a conspirator with Mr. Rajaratnam to share insider information about Goldman. The government intends to submit evidence that there is such a conspiracy. The government is going to show that on at least two occasions, Mr. Gupta attended Goldman Sachs board meetings and within literally minutes of attending those meetings, he called Mr. Rajaratnam."
U.S. District Judge Richard Holwell agreed with Mr. Streeter that tapes of both men talking with Rajaratnam would be allowed at the trial, despite charges of a “smear campaign” by defense lawyers.
Streeter charges that Gupta told Rajaratnam of an impending investment in Goldman Sachs by Berkshire Hathaway. Rajaratnam was later recorded saying that "he was told by a board member at Goldman Sachs that Goldman Sachs was losing," at which point Galleon sold off its stake in Goldman.
Eric Bank, Freelance Writer
Eric Bank, Freelance Writer
