Galleon trial witness testifies

A DISGRACED former McKinsey partner told jurors at the Galleon Group insider trading trial yesterday that he leaked stock tips about the firm’s clients to hedge founder Raj Rajaratnam.

Anil Kumar was the first of several of the hedge fund founder’s former friends to testify for the government at the high-profile trial in New York.

In dramatic testimony, jurors heard Rajaratnam’s voice for the first time, captured on FBI wiretaps in conversations prosecutors argue show he traded illegally on company secrets.

Kumar has admitted accepting $1.75m (£1.1m) from Rajaratnam, a one-time billionaire, in exchange for supplying tips on McKinsey clients, including computer chipmaker Advanced Micro Devices.

On the witness stand, he recounted that Rajaratnam told him: “You work very very hard. You are underpaid. People are making fortunes ... so just keep track of your knowledge and share it with me.”

Sri Lankan-born Rajaratnam, free on bail since his October 2009 arrest, is accused of creating a network of tipsters who fed him inside information that gave him an unfair advantage over other stock traders.

His trial is the signature case in an insider trading probe that has shaken the $1.9 trillion hedge fund industry.

Kumar stared straight ahead when he arrived in the courtroom, avoiding Rajaratnam’s gaze. Rajaratnam took notes on a white legal pad throughout Kumar’s testimony.

The case stands apart from past insider trading probes because of the use of wiretaps, tools usually used to tackle organised crime groups.