AKIN GUMP STRAUSS HAUER & FELDLLP ------- Attorneys at Law

The Honorable Richard J. Holwell United States District Judge Southern District of New York 500 Pearl Street New York, New York 10022

December 16, 2009

Re: Modification of Bail Conditions United States v. Rajaratnam and Chiesi Docket No. 09 Cr. - (RJH)

Dear Judge Holwell:

JOHN M.DOWD 20288743861fax: 2028874288 jdowd@aklngump.com

We write on behalf of our client Raj Rajaratnam in the above-referenced matter, which we understand was assigned to Your Honor yesterday and is currently scheduled for an initial arraignment on Monday, December 21,2009 at 12:00 p.m. We write to request Your Honor's reconsideration of the terms ofMr. Rajaratnam's release on bail after completion of the arraignment. 1

Procedural History

At Mr. Rajaratnam's initial presentment on October 16, 2009, Magistrate Judge Eaton granted Mr. Rajaratnam's release upon his signature of a $100 million personal recognizance bond, co-signed by five fmancially responsible persons and secured by $20 million in cash and/or other assets. 2 At the bail hearing, the Government sought to have Mr. Rajaratnam detained despite the facts that Mr. Rajaratnam (i) is an American citizen living in New York with his entire family including his elderly parents, (ii) poses no danger whatsoever to the community and, (iii) to the contrary, has been a vibrant and philanthropic resident of the New York area for decades.

In setting the bail, Magistrate Judge Eaton stated that the Court would revisit the terms of Mr. Rajaratnam's release and reduce the personal recognizance bond if Mr. Rajaratnam cooperated fully with his supervising Pre-Trial Services Officer. See Hearing Tr. (October 16, 2009) at 38:5

1 We sought the Government's consent to this request but have not received its response. 2 A copy of the Defendant's Appearance Bond with the conditions set at the October 16,

2009 hearing is attached at Exhibit A.

One Bryant Part< I New York, NY 10036 / 212.872.1000 I fax: 212.872.1002 I www.akingump.com

AKIN GUMP STRAUSS HAUER & FELD LLP ----- Allomey~atlaw

The Honorable Richard J. Holwell December 16, 2009 Page2

- 38: 10 (noting that, "frankly, if the pretrial officer reports that everything is going very well, then I think it would be logical to return a bit of the money.")?

We learned subsequent to the initial presentment that the Government made numerous errors and misleading arguments in the preliminary bail argument, operating from the fundamental misimpression that Mr. Rajaratnam intended to flee, which he did not. Moreover, at the initial presentment, the Government violated Title 18, United States Code, Section 25 18(9) in failing to tum over the wiretap aprlications prior to using the wiretap intercepts to argue for Mr. Rajaratnam's detention. We raised these issues, and the very restrictive travel limitations, placed on Mr. Rajaratnam by letter dated October 29, 2008.4

In a subsequent hearing before Magistrate Judge Katz on November 5, 2009 to relax the terms of bail, including in particular, the very narrow travel restrictions placed on Mr. Rajaratnam, Magistrate Judge Katz deferred to Magistrate Judge Eaton's sentiment at presentment, opting to defer reconsideration until later. See Hearing Tr. (November 5, 2009) at 10:25 - 11:5 ("Judge Eaton, as I recall, said two weeks ago that maybe in the end of November, if things are looking OK, one way or the other, he might be willing to reconsider.").5 Magistrate Judge Katz did, however, relax the restrictions placed on Mr. Rajaratnam's movements, permitting him to travel within the forty-eight contiguous states. 6

Argument

Mr. Rajaratnam has fully complied with the terms of his release and has dutifully followed every instruction from the Cowt and Pre-Trial Services Officer Santos. Accordingly, consistent with Magistrate Judge Eaton's guidance, we respectfully request that Your Honor reduce Mr. Rajaratnam's personal recognizance bond to $20 million and authorize the release of the $2.5 million cash posted by Mr. Rajaratnam. The Court should rest assured that Mr. Rajaratnam will continue to be present for any and all court proceedings in this matter. Mr. Rajaratnam denies

2 A copy of the transcript from the October 16, 2009 bail hearing at the initial presentment is attached at Exhibit B.

3 The Government effectively conceded its violation of the statute and produced the wiretap applications subsequent to the presentment

4 A copy of a November 2, 2009letter to Magistrate Judge Katz enclosing the earlier October 29, 2009 substantive submission is atta{;hed at Exhibit C.

5 A copy of the transcript from the November 5, 2009 hearing is attached at Exhibit D. 6 A copy of the Defendant's Modified Appearance Bond with conditions set at the

November 5, 2009 hearing is attached at Exhibit E.

AKIN GUMP STRAUSS H AUER & FELDLLP ----- A!lomeysellaw

The Honorable Richard J. Holwell December 16, 2009 Page 3

the Government's allegations and looks forward to clearing his name. Immediately following his arrest and release on bail, Mr. Rajaratnam issued a document "hold" order for the Galleon offices and had all paper shredders removed. He did so to ensure the preservation of all Galleon records which he firmly believes will exonerate him, a concrete demonstration of his intent to defend himself against the allegations contained in the Complaint. Since that time, Mr. Rajaratnam has carefully worked with Galleon to wind down its business, to take care of the Galleon employees negatively affected by the Government's sudden arrest of Mr. Rajaratnam and its related press conferences, and to ensure that the fmancial interests of Galleon's investors were fully protected. Despite these efforts, his bail, as currently constituted, carries the stigma of being the highest such bail in recent memory, far exceeding the terms of release for Bernard Madoff after Mr. Madof:rs admission of guilt. Accordingly, we respectfully submit that Mr. Rajaratnam's complete cooperation and compliance with the terms of his release and instructions of the Pre-Trial Services Office satisfy Your Honor's concerns and warrants the reduction of his bail.

In addition, several additional facts have emerged since the initial presentment before Magistrate Judge Eaton which further support the reduction of Mr. Rajaratnam's bail. We have recently confmned that the Government's disclosures to the Court in the Complaint contained serious, material misrepresentations and omissions that call into question the Government's allegations against Mr. Rajaratnam. The Government represented in the Complaint that "CW-1," now known to be Roomy Khan, had begun cooperating with the Government only in November 2007 in hopes of receiving leniency in connection with an expected guilty plea to criminal charges. See Complaint, ~ 18, fh. 1. 7 The Government presumably made this representation in an attempt to vouch for the reliability of Ms. Khan, whose purported information against Mr. Rajaratnam is the centerpiece of the probable cause offered by the Government to the Court to gain judicial approval for its wiretaps and to seek Mr. Rajaratnam's arrest.

The Government's disclosure with respect to Ms. Khan has proven to be both incorrect and incomplete. Court records that were recently unsealed demonstrate Ms. Khan had been previously convicted in 2002 of wire fraud and had specifically cooperating with the United States Attorney's Office and the FBI against Mr. Rajaratnam well before that. We have also learned, based on Ms. Khan's allocution during her plea of guilty to new fraud and obstruction of justice charges on October 19, 2009, that Ms. Khan violated the terms of her prior "cooperation" with the Government and the terms of her probation by engaging in additional criminal conduct subsequent to her 2002 felony conviction.

Furthermore, the Government failed to disclose to the Court that the Government in fact found no evidence that Mr. Rajaratnam traded on insider information allegedly provided by Ms. Khan

7 A copy of the Complaint is attached at Exhibit F.

AKIN GUMP STRAUSS HAUER & FELDLLP ----- Attorneys at Law

The Honorable Richard J. Holwell December 16, 2009 Page4

resulting from Ms. Khan's purported cooperation against Mr. Rajaratnam earlier this decade, despite an "exhaustive analysis of the labyrinth of accounts associated with Galleon." ("Based on information obtained to date, Rajaratnam cannot be tied to illegal insider trading connected to the Intel infonnation. He also did not provide any monetary payment for the [Intel] information.").8 We respectfully submit that this exculpatory information would have been relevant to the Court's consideration of the Government's request for an arrest warrant against Mr. Rajaratnam and, at minimum, would have directly rebutted the Government's argument at the bail hearing about the purported strength of its case.

Conclusion

For the reasons stated above, we respectfully request that Your Honor reduce Mr. Rajaratnam's bail conditions to permit his release on a $20 million personal recognizance bond, co-signed by five financially responsible persons and secured by Mr. Rajaratnam's personal property valued at $17.5 million, which has already been pledged.

Thank you for Your Honor's consideration of this r

Enclosures

cc: Assistant United States Attorney Joshua Klein Assistant United States Attorney Jonathan Street Pre-Trial Services Officer Santos

8 United States' Sentencing Memorandum and Motion for Downward Departure, United States v. Roomy Kahn (sic), CR-01-20029-JW (July 1, 2002) at 7:11-13. A copy of the Sentencing Memorandum is attached at Exhibit G..

$I 00 MILLION PRB TO BE CO-SIGNED BY 5 FINANCIALLY RESPONSIBLE PERSON'S (DEFT'S WIFE AND 4 FINANCfALLY RESPONSIBLE CO-SIGNERS); SECURED BY $20 MILLION CASH/PROPERTY; TRAVEL LIMITED TO NEW YORK ClTY UNTIL S20 MilLION CASH AND OR PROPERTY IS POSTED; AFfER IT IS POSTED, lHEN TRAVEL

I LIMITED TO 110 MILES FROM MANHA IT AN; SURRENDER TRAVEL DOCUMENTS {&NO NEW APPLICATIONS);

" REGULAR PRETRIAL SUPERVISION; DEFI' TO BE RELEASED UPON TII.E SIGNA TIJRES OF DEFf; JUS WIFE ANP 4 OTHER CO-SIGNER; REMAINlNG CONDITIONS TO BE MET BY 10.00 AM TIIURSDA Y OCT 22, 2009

A098(Re'f.OII09)Defcncbnt'sAppear.u~ccBond BAIL MODIFICATION ON 11/5/09 BY 0 ~1z.t '1111-

United States of America v.

RAJ RAJARA TNAM' Dqendant

Southern District of New York

) ) ) ) )

Case No.

DEFENDA!Vf'S APPEARANCE BOND To obtain the defendant's release, we jointly and severally agl'Ce to forfeit the following cash or other property to the United

States of America If this defendant fails to appear as reqwred for any court proceeding or for the service of any sentence imposed as may be noticed or ordered by any court, or fails to comply WJth any conditions of release set by the court considering this matter (descrilu the cash or other property and any claim. lien. mortgage, or other encumbrance on 11)

Ownership We declare under penalty of perjury that we are the sole owners of this property and !bat it is not subject to any cla!Dl, lien, mortgage, or other encumbrance except as disclosed above. We prolillSe not to sell, mortgage, or otherwise encumber the property, or do anything to reduce sts value while this agreement is in effect We deposit with the court the folloWing ownership documents, including any encumbrance documents (list all doCUI1ll!nts and submit as auacltments)

Surety lnfonnation. We understand that the court and the United States of America will rely on the surety information in approving this agreement

Conditions of Release. We state that we have either read aU court-ordered conditions of release unposed on the defendant or bad them explained to us.

Continuing Agreement. Unless the court orders otherwise, this agreement remains in effect during any appeal or other 1evsew until the defendant has satisfied all court notices, orders, and conditions.

ExoMratton of sureties. This agreement is satisfied and ends if the defendant is exonerated on all charges or, if convicted, the defendant reports to serve any sentence imposed.

Forfeiture. If the defendant fails to obey all conditions of release, court notices, a.od orders to appear, the court will immediately order the property forfeited a.od on motion of the Umted States of Amenca may order a judgment of forfeiture against the signing parties and thetr representatives, jointly and severally, including mterest and costs.

ETC

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF NEW YORK

3 ------------------------------x 4 UNITED STATES OF AMERICA

5 DOCKET NO .: M-09 -2306 6 - vs-7 8 RAJ RAJARATNAM, et al . ,

9 Defendants

New York, New York October 16, 20 09

10 ---------------- ------------ --x

11 TRANSCRIPT OF CRIMINAL CAUSE FOR PRESENTMENT

12 BEFORE THE HONORABLE DOUGLAS F . EATON 13 UNITED STATES MAGISTRATE JUDGE

14 A p p E A R A N C E

15 For the Government : 16 17 18 19 20

21 For the Defendants

22 For Raj Rajaratnam : 23 24 25 26

27 Audio Operator :

S :

JOSHUA I. KLEIN, ESQ . ANDREW MICHAELSON, ESQ . JONATHAN R . STREETER, ESQ. U. S. Attorney ' s Office One St . Andrew ' s Plaza New York , NY 10007

JIM WALDEN, ESQ. La SHANN DeARCY, ESQ . Gibson Dunn & Crutcher LLP 200 Park Avenue, 20th Floor New York, NY 10166

No Audio Operator

28 Proceedings Recorded by Electronic Sound Recording 29 Transcr ipt Pr oduced by Transcription Service

1

30 ---------------------------------------------------- - - ---------31 KRISTIN M. RUSIN 32 217 Pine Meadows Ci rcle 33 Hickory NC 28 601 34 kmrusin@earthlink . net

ADDITIONAL APPEARANCES

2 For the Defendants

3 For Anil Kumar : 4 5 6

ISABELLE A. KIRSHNER, ESQ . Clayman & Rosenberg 305 Madi son Avenue , Suite 1301 New York , NY 10165

2

Tt COOPT: Al l rt(Jt"t tra l

" Ht le t handhnq the ball procdlrtqs rel.atln

t~..B COURl You ra not hlnq requl.r~d to co.st cah,

2 tNt. you are beir.q ttquired to oost pco.,.rty \.tltt\ a.n ~qul.ty ot

3 two (llllhan Clollar.5. Tf\e tcvl .u 901n9 to be re$Uic:tE"l t.o th eonU.I'lent..l Unt.t.eCl Stteo. \ft\1e:h l thl.nl( .9hculd e.x -:.loJde

1 Ha.~ah and a l so Al3&k.l.1 ,bul,. to th - WhAt wo usot.d to c~l 1 \l'e 6 old forty-eight. $t~t~u Okav

l ' m cbecl!inl) tl~ 'box lh.et ~' qvote, Scvrn:nder t travel docutDer.,._ s and m no ne-w IPPltc&ttun. You've alxeady

t ..,rt:eMerftd tha p..ssport It vou\d be lol.,tton of yuur bSl

tO canchtlona. i f you .,.re to ttet'lpt. to acqun:e o "e~ ~.:.sport ct

H ~"Y 1riod or. _ndged. '-0 bUy bUs t.Jc.ke:., oc t.rain t.le~et. or

t l a. pJa.ne tlc.}f;et. th.aL vo.Jtd td,e you &td64: tM forty-et-qht. U atatea. Ju.st att.e.-pt.1'1'9 to do t.bet. "a-uld aubJect you to r.--

1( rr.at for v1ol&t...i.nq )'0\JI"" bu.l condlt.ion s ,,

,,

"

Mr . St.~eeter. l think ~ou .sald requtac pretr i a l

N!ol. S1 REETER o lhlt' t coer oct, Your Honor.

Tio!::t CoVH.1: And the prttt".taJ. sc-vlces otticer hece

11 if111 C-lo.p1Un al.l ot t.ho1r .a:ul at.~out- r:qula.r pcetrhl

:0 .tUFt.,lSl("f\

MS . K!RSI-,.ER; t'e reldel ln C.1it:Ornt.a . Juac:a. so-

B C~t On" o! U exp!an.et1ons J u:.lrl. ";.hey vUl

U q1ve fOU l.S tlot they wtl t q1ve you ti':'e telephone nu..ber ot

24 ao:N u.s. probation -- pz:etr1l r".a.C-' oUic.or \II Ci:11tcnu

26 who .. .as a e4 the rulVt danqcu to t.l-_o c.omrnunuy , but tho:e ccmctn do 7 not cua to the t~rct lovel *' 'fO\J ~now. 1.h.e speciCic- 11#>-CV

a signt.f leeot C'uf'"ttTn "'e hMe abQut !11.:;1\t. cult

'

Our co~crn lllanatet h.o"l'l t~.tee bas1e ffctors . One.

10 th.1s ts .a. deran.dan:. \tt'IO l"u. t~e b@lt-~ve, an t.nOCWIO\JI u\c:nt.tv

u w flu q\Ven :to- ~t'luq~ .'-' !c.cinq. and l'll tlk l'lo.c .bou.'-

t2 that:. '" ~ minute,

13

u bo,tl avt stror~qly SU4J9~l' an J.ncliflatJ.on co tlo4

rs ).nd. ... nr~ t.l'1u !.f! a d.ofendant. ""ho cl.tly hi $ th ,6 vhee..,uh L to tl

17

\ih.th .co.cpoct to :Ht Jncent1.ve t'O tlee, thl.o h a

1.ndivid~a1 who -' "ov, cas~cl on tho c:.ol'll"ph1nt tt'lilt was

11 f1le.d, !&-etnq very siqntetca!'\t. .sa.nct1ons if he convl.Ct4d

zo Th.15 1.s .an lnudet t.r.ad1nq CU 1.11 '\ifb.l.c.h tJooe tJUldeHnea ate

21 qen~r.oally f'JUld.oci \)y lht' .ount. of qa.l.n

Tn .lfo!IJ0\1nt. ot qa1n t.ere 1s tventy el.lhon coUata. as

23 .. u~vd In ~~~ "'""'111M Al:d tr.~t woula jala ~~!doll~., :.- u1nqc ot Ppt'Oltl.,....t.ely n.1ret.y-sevcn lc a h.u'l'dr4!:d nd t~enty-ono

2S ~ttCnth5 . That.'s "'ttY a.J.(!If'lificnt sentence* Po!lltt.tc1tla.tly e:or

10

.sorteone vho, J bel14tVe. u in hls- titties. earl; ft!U.et

HO: o 10. tne ltVlderce that \ole have c:znn1t Hr

3 lta J iil'ralnat'tl i, QVOtwhe.lnlinQ l}'le compht.nt. 1dentttae 1\ulf\e.tous

4 ~:ecQtded c:onvttA\.lOna 1n th.e 11eroua eonvere&tJ.o.n thtt ate re.::oroed that ver:y clearLy

'" d e p .t c:t the t:c: tht tll.J.s d.e!end&r~t ~1\gage-d t.n ved,tlblt

,,. ~mor9abord. ot ~ ntdr Lrl.dl.f'Vil t&ctics

He' JQII\Obody th1t traded o.n !:he b~tu of

' ' aequ1.i tto1\~ R ;.raded en th bl.$1..1 of J011"1~ vnt\1rea . tie n t..ra-ded on the bai ot inlonwt1.on r~lat:l.J\9 to urn1.1\q"

ta announrernent.. lit t.racH:d on the- b1~ns -- rath6t. h v:>\lld N'te

1t trades by t:alunq ehott poaitloa..a, by tAX1.ft9 ... c.nq J)C>IIit.;.otla H 20 orould n9aq \f\ P"'-t.l:.eT" of t.radinq c.hat v.a.a lntende4 a.o Male

?1 h:l.S 1119"1 t1:1vu.y

2J eon.t"t.lons a:tpic.teo. \!"\ th

ll

intent.iona l , wil l fol CO('ICl~et

Tbe.re ' .s a eonver S-at ion d e p l et-ed between the d.tendant

l nd OanJe)tQ Chiesl, 8 CO .. COJ"SpJ..a:a.lor . ! bl l CVG Cl'-.at Jn the R3ja'Catnafll c oJ!op! :t1nt sne ' .!: identlfied 4\S C. C. One . Bu:; s he i s 5 iclel')tified in a s e pcrate com:olaint tht tho Govrn~nent tiled

today . Uut lh91e 1s c t\e c:otwors~t.lon, for e:.-ampl e, i n Nhi ch

8 Mr. Rajuatna.n ~nd Ha . Chh~s 1 ~r e t.& llc ioq about Ak~rni, a. s co mp a ny in whieh the Governrnt:l')t a)leq~s t h ere vas t n$Jdet

10 crac:linq, a nd the y both ag.teed that there ' s a ne-ed to be. quote .

11 radio silent

tbere'3 ~U'IOthe..r c onversat 1.on b e 't.v e e n Mr . Ri! Jart n am

1J and Mr , R\l tt~nr 10 whl.Ch they talk about checkinq into .sOli\

15 t'he COO f or lunc:h tornotro~o.~ -- or f e r lun-:h. next f'r iday , and

16 says I don ' t Wbn':. ar-yb,:,Qy eh.e to Tiot -alleql'$ ..,ha.t we

10 .beheve t o be. e q!'eq! OUS crim.ioa.l eond\lC't. d ating back to 2006~

\ 1 coru inuing a l l tho way U\\.o 2009 , conduct th.at occurred on

U p-eu;istent , conce rtt:ld . repeated basi\ . .\nd. we t-ave spoke n wn h

13 c oope r ac tnq Wltr.csses who hAVe indicat!!d that the y have a lonq

u . history of enqaginq in ln:lide! tta

1 to rak t.l'a~ !-f\stdet tx.-dtrq

T!:: e ra i..s vi-:isonee t)\at. th1 a o!ei'KI"nt., toe ~XAII!Ple, had d1SCU!S10r.:!J Ab4U1. Lakitt~ bCt.h tC"9 nd .sl':-orl posit. lr:m& lP ~ pat:: leu lac stock ~ s lit was b'Jt.&.d1nQ tip a long positlon, ot

t'hare ...,._, ,an tnt.e-nt. to build \lp ' shot't postt ion, so that 1t

t wo,Jld be much harder for t~ ... Covoxnmont to dotc.t. that sot't of

ac.t,1vity on Ute basis o! a tov1ew ot tel~pt\on$ c-e~;.o&os, tt"odtnq

1 tc:orda. and. t.b-e ~ort of c: .. ~~:e-un.stnthl v\.denc:e '-1'\t. ~he

t Gove.rnnent r;or~lly comes t r\tO posla,a1on of wJt-1'1 r4tpecc 1:0

11 tny are 'ltnoN.:ng-ly ..nqaqtnc; ln e:oruti.)et. t.het 1.s C:UII.lne.l, and 1 t.he pauun o! conduct. ovet Ll\ )~eats relatitu; 1..0 Ll"e .t.ns i d-et

& tcdinq t..he de!enrtf-nt. naa el'\;agod 1n ra:~l\~~ a starkly d iftettl"'\.

t6 port..l"ilit than Lhe po.:t1:dt plr,t:ed by aol"t. o f l.toe o u t.e t'" hc:e ot:

'' tho defendant. ' & ~nvolvel'!lent 1.n t.he .bu1tte.:u c ornmuntty, ln

t1 cl\1-.citbJ.ff cir~l es, t. c:etora. ,, And. you know, there' 1 cU tn vbich ...... and 1 M bt!lleve T.t!at. th:t. s ;u not 1n th c;o't!p Lint, out th-e.t:e ~ s ., call

lt tltAt. tu.nd ef u:bodiea t:~e point tht 1:he defendant -..a.c~ hi

u Uve h.hocd by enq~qln9 ln LnUdea: trcS1tHJ

!here's ~ eorwersation tMt. ve ~ve .Ln -.tucb t.he

14 de!and&nt. i s ta..l.kl..n~ to n indl.v1du6l bout a coo:pany -:h a t. u.

1$ I'IOt J.dnt i!l.~o tn lht- cOCtpll...int, 61'\d tt\e 1ndivtdul ts tUu.nq

to tl': ct tendant cbo.ut wht)\er r:tr not ha eah get a JCb wit.h th-e 2 dt!endant.. And yod It nov, there J a d11C1J&.s1on about you go ar'\d

you do your thlnq proper l.l/1 nd you tell rf'C all o f the

1 .t.ntorm;atton there

1 by oay1ng- t tht nd ot the dY l.t\t a wt'l&t trtake~ us

aucces..sfu L r-:li!l"' t. tJ-at " r-ave a Kolodex. you kno" you JU-St

1 C-1.11 , .ca.ll, cell, nqht.l

And -:;h.ls aq1n vetl to the contrast. bet.wee.n ttl~ outu

p1cc.ure t.hu Galleon technol09 w bu1lt. on funoAII'!:ei\U l 10 analysis, whtch 1 s a. te:r-a re l attl\9 t.o tha a.oalysi.s of COI'.IPi'.nies

11 thAt fCC\J5es on -:.heir e~n.1f'l9t r.d their !u-nda!:f"ental~ and the

12 inner truth ot lolbat 901nq on. Wblch was ~hot th1s- was

u t1.1nda111n1..lly j~at thievery of l nu.de l-ntcrm.at l.Ofl .

"W!tl: rc~poct. to tho detendAfl\. 1 6 whecew ttt,al t.o Cleo.

16 t.h.t.s ia a p er.son 1orh0 ha very cltP ond 1fery broad 1n:::e:rnatJ.ona .i

16 t.t Tl'lt$ 16 $Om4lone -who i e .S 1 L.anlren e1t1.2e-n , i n adct1t.SQ"'

11 t.o belng a 1..1 S e1then. ~e ~n pcopctrt"y ln Sn. Lank~ . ~e

It holds .a broke..raq e account in Srl t.ankA . M eontrols thro\tqh

t t ~bu. b:rckerge a.ccOt.mt. appcox.i~~~ottly Uve pereeot: of one o( the :0 S..tJ Lah):.a_n c-or..qloe.rt : Mb" tl" la.roen eongLlmerate 21 h.sted on tbe Col.._l':lbo sc.cc:\. exd'oanq Ana in effect.. has tot

221 li.!e ln Sri LaDka t:b&t vut1n9 tor J\tl!l shotJlc1 'he chooa to

?J !lee fl:.s als-O 90t pJ:oprt~e tn ,..any ot.her eountr1es w

2 believe he's qot pre:pert .HU n !.nqllnel .1.n roronto. aJ'Id. UL

~ S.&.n9apore .

In a6dn.1on t:o ra..at. . t~ls 1.s s.-..'boclv 4"'0 1\-.._~ n

z txt-?rut\1 ta.. .av~;.L .ac:hedule tie travels Jhro.ad on fte'-f\IIOt. "-d 3 cl.!qulac hll.:tl$. ln oC!ect. Lhi s 1s sor.~cont!' vto, e~n c.'nouqb "O

1tvee io "''" fc)J I'. l3 oaateaJly, by Vtt."tue of hi,. I.IPal t.h. nd

s .by virtu ot 1.1~ hoJd1f'l9~ &b-road , and by Vir;t.Ua o ! h la

~ j n tert't l.O'lal c:ontc-tt, 1:1 Xltlly a el.~l z.en ~t tho vor: ld. Md 1 tbat. coupla wlth tl' O'-rtec thinqs c..r.at I menti.onec1 bGu\. tho

a $11ct1on:; h't f&canq an~ t'll..S lncent1.ve to - hi 1ncUr'\At1on

9 t:o flee jut htqht n our coneern 10

u u.s ce..n en t.he bencb tor a lonq t:lf'fle 2 lh~s u 1- slJ'I\plt uuder trlOlnq c1se wnece, over the c:outa of

2$ three ot tour yer, lhey ve got su. o.r !Seven 'ti)Cirr.l; 1.1'10 thoy

bel\ve t .bey l oaV4 avl.d.,c bu;ed on two t hin.ga - one ,

2 coopert.L\q otiLtncss who ' 1 apt:~.e.tentlv t-e~n coor1:t1nq to1

loat \.0 )'n, bC.S A9iOod tO plO'

23

from 1 994 to 2000, CCII"ibl!Unq it into ' very tarqe al:lartl1\ent,

2 exttem.ely 'Ja luable -- prob-.bl.y 'lalue4 at. close to teo ~illi on 3 dollats . 5~Jt at a. minirn:.~m, tbey paid about t.hn~e ad .J .... t1f

~ :nillion dollars for 1t. 7~cre ' t no !lloOl."C'i139"e on. that. .

~e were p rep.ru:ed to po-5t. t~a t as secuci ty just as hls 6 co-def-:!f"'dat'lt. dl.o and to,av s-iq~t \!X'CS frc!tl 1-us 'oll. fc ; hts

1 bi o tbn:, ,.,ho " s .Ln erte eourt&.OOt"'i his !l i&Le r'. wt",o ' ~ 11\ c.he

8 cou~ troom; tns elflployees , ~ho e.re ill t:t.e c~urtrootll }'>ere t.o

9 upport him; noimbers of cl".adta~lti Ot98'1\\ut i.on l Ute Geofft"ey 10 Canada ot' the H.ar lfttn Ch;1.ldren !> Zone .

11 AnO tJ.r Canada, t o his ctedt t , loolt.ed me !t'l the eye

ll and $id Mr . w.-lden. t don't h io.va very c~refully, and I saw n t Ol"e ins t a.nec where Mr. Ra)are.tna:o 1 i3 alleg~d to h1.ve t old .ilt'lyone Lo l l(! or 4ece1"e anyoo. lt 1 you l ook at t h e em.J.re -COti\_Olaint. t.;~~c lfOI\Ot , you' re. qoinq t.o

9 ee t.h~t '". het"e &re abou~ si )( :5toe)cs, Meybt eeven .itcks, t.t-at 10 a.&e- ll.sted . And the first th:rco ~u: e ca~ent ially s1n91c

11 c.oopet"atino-nd co- sJ..qn We don 9 t ttlink all

.s eleven are nece$.t'lotry . We. think tht ' ~ unduly cul\'lbetsolll.e , But i tf 'tour Honor -wou l d l i ke t.hctn tc. t''-'Ot'Y Sit'19'le o ne of them 11.

w:i lhng t o post t he bor.d. And SORe of t hc.m, You:- Honor, hve

a .sa.ld t o \1$ wo

sto~er ponl.ty

~!'d toy the uy. 1t'' th kind ot ~lty tl'tJit b:~s 2 bee11: 1"'f'o4 ~.ec:onc ly 1.n U\Sl.dor t..rad.l.J\g C4:ses. The~e b.-.-v.e

4 bton 1n til h .$t c.oupl~ ot years detefldant.s who eM)aqed 1A s Jntlder tt'adif!O 3Ublt.t3t.4-lly less eqregious t.ban lhts

t dc!endnt .. ~.o toc.ci.~e-4 ~1\tr~ecs on tt.e vrd~c -o! tc--" ~cacs.

21

1 \r"c- not alhgi-,9 LltaL Lhaa J. & Pa'\u !z:aod tt.at. uw-olve4.

hundred ...... a1at.y tul.laon d..,U~r~, but t.hat s POt th oo1nt

n point. 2..1 wnat ~c t.,.e penal~1es 'hilt "the

10 defendant 1a t' c:lnq. anci can t:be e-ottrt ..1~se ~c.me sort of ba~l

11 pac-lc9 t)'at vould 1 tel'tcd tbour - - no money ._.as ru.ds on th.;at dt:aL It didn't q~

t:hrou')h The Co\161'n~Mnt Nee a. dt:ei~1on !or '"uc-po, ot N)1nq ' pu.tnb1 ct..le sbowhvi tht ve d.id.n"t: need to U'~(;luc.e tl\~t

and o.t collld ceapllcat th!-r.q, n:e ~plal.nt. 1, l.rlJ.::.y-Joe: :.~en

s paqet l t Jt&.ros~

Sul tt.o '-ic1cnce ve Nvc abo\lt. S.panuon W'laitLU.abl )'

1 ho.,.. .,dlfr.~t. tntant1onl fraud~ oc a-t least t..he 1otnt t o

1 ,11J~ul1y en9aq 1n !raUdl . SO tbere werel'"t 1.--''\Y profit. '* 11 i-O }\ave e1r~~nt1al evJdenC"e thilt. t.t\'!rUeulcly wht!J'l 1 '11 retErenc:l.nq evidence relatiru; t.o intent

!l r lfonor. t JUSt. don ' t.

ll k ft\)W whe re All tt\e defendant ' s b:S$Cts are . Sul T t:iln tell you 1e tht the Sn La,.k !nformat1on -..e h ave ~as baseel, 1n llt9

tt r.teatur;e, on le&tli\Ony that th~ ctetendant. 'n.i=self ptovided in An N StC pcocaed1nQ a. fev ~~.a-r.s .. qo ~ ,, Anci On.tly, you kno .... Just t.o -- jutt to put a u ]Utt to tl

-.

r

' clear ted Uaqa hoc c.hat. ri1htt:ully e&I.US-O conc.e~n.

i-1~ COC.l"T: WB11 1 1 CO-"'e tO a ~'J.ncl031!l sc::.-e.d-e.re

1 bol..,._n theje I.WO Cl'IIOCAte 1 tt"l.t'l.k Cht. tl"e .e.-"0\Jnt or tJie

$ the r~atre Cl$~

1 collattal. v1HCh earn' )Orte t-ny iltt.OW\t: of l..ntuesc. th.e.se J ould. be 11 t.tto cu11o J t1 t.he i i'M\Odllt4 New )'ork City a:oa . Bu\ "' J don't know, ll'ltybe et;en 1r. tbis el ect:conic 9e it 1$ ne c essary 1 !or him to trval . .\nd orntUNa \H allow cer ta 111 st.te s .

f O~hor tlme,a WO aay t.ht no' qot to qet. 3-d\tiince p.erm.i~.s1 on fYOfl'>

l at. lean \.ho u.s . M.torney't Office and 1.-he prel.tl

..

1 ~Y~Y pr:t:.tlll ser.,lces ottl,er aa)'a tnc.. :.h:u quy ra-..1\ t 2' beln .. l:tr, ... , 1 ...

Ttft: CO\JRT 1ell ae why. SUJC

M:l WALOfNl td t.l'>...e other ch.lall h HI( . liA.l"' l You i-ttl\er .. My J JUa.t as~ ot~o h' "!

.. l li t CCKWH - - the deadl.tt"e: -- yea

n\ "f' ,\LtJI..tl t lr-cht.lo_,...lly, ir v-. vre Ul tt.e nete

12 Si'~':.ftt, tn per'"' 11 ll:~nd o>! -:"t:.e. qo.v.q Le And ..

..

tS to do q,-aduatMt ... _ qradua.t.eG .:~anctlona, U vou w~u. rot non

te c.olllplh,ce. And JO lt' t.en IUl11on dollars - l \.hink J eouto

t? t:ntll'li>l.o t.l'lat. fth t y qu1c"lcl y 1 ceuld p r oba b l y qor. t\llent.y,

'' Your .. o,.or. bvt t.hat would really !llllte a cath-tt.rappd If llC~oJtJ..(;t'l

Z0 lt.J'.d 10 I ( 1 C.O\I.]d bve te.n lJl the flrlt lf'lottlf'loCe , "d

tt thn ve could rva H. \.f'At, ana ~~ on O..c:!!HI.bet l9t i" t.urr~ed

22 o~t t~at tner vr c:autes !or concfl. t.l'lel'l TCNr Honor c.ould

H a l\rl y lf\cr t.be VAU'\t .

1 CO""'pllint ~ ObVtO\IIlf lUTI'-1.-.q Ua ili..O'S l.!e \lpiJ.de dO\rf\, el'ld

2 acme porl are Abl t.o bet-ave- in a .cat.ion l .uy when

1 conlron\.et1 w.l Lh thllt 0\.helt people ma y ao rS~et..hit\9 i.tl'"utst.v.

.- ov" t.hovQ"h iL doeen t. m&kt a ense loqicaH y J rn tryi.nq to ;Jve thf" Goverr.~nt r e &Jonable

&la\ltt.nc.e tht the' ,.., 11 not be- s ome :a.udden l.w-l.y, 1 t.be p.:re~n.a_ se.rvac ofhct:c

t rpo.,.ta tt-\ veryt. .. h\9 u. 9.01.ng very ~11. ct-.n I \.hll''li: it.

o 'tl:o.;ald t4 lota.cat to rt\lln bt"t. of ~tte aoney

" tZ 'Ulhol'l, co~lntt101\ or c h ra e-qt.;~t.y. whien ca.n a..e &el

u ett~ c~on oe ION c:utltles .altl'!ouqb ve1e h:.aorn.ed tl"' ''* d.t not t.o ~ c.oo c.HeQ bout sqcu.r&.~"- tnrl '' t.t.el" . ..

" ,,

HA . lfo\LODt: 1 don t. ..,.._nt t:o qet 1n n .,.~nt ws.t."PI

Ttl COUAT 1'tah Yeah.

H.\, WAI..OtW Okar I'll c..a.ke

rn COIJ1n r aut.. yoo .k:.neoll.

r~t ~T: -- t!o:.e aoo.ne.r U>.e better a"ci r '"

2'.1 thS,Iltf'lt of t&)'i1'19 t~exl Waneao y o.r r;ext. ThunQ&y 11, you 24 ltnov, c:tthty perc.eM ot 1t cn be po.s.t.ed hut c.~r' a qoo.:l

26 .eton wt\y y0\1 thould 1\e\' Caw l"'or~ dy$ tor lhe r~, 1

39

t.h.lnk th Gt;~ve:r..ITent l'tl.iiY not decide to m..ake a &tq f u..a5 .t~ut ._

teo.r .ot dityt. !ut l'ra. '-"'M..~. WAt.OtN: Thitl'"k yc.u. J tJd.qe.

'tc!E COURT 1t:\.ICA4ay t te'\ ~ .... ll u ~C't ~.tte:at.s P~*'-'-Y aoc.1.01l And J nl"'!! tocl1aq ll'lat

tl

tho.se !O-\U' co- .a191'\4ts ate qoinq t o b~ C)\.llta ~~bstant ia \ popl a M&ytl l ' ll b vront;~, bt~t --

4;-0U ct.ay, that~ a tot .. ! o! !1..-e ~~l~Jf'lers. Ute ..rt.re --

T?.E COU~l U: t .s riq~t.

10

11

M/L l

A K -1 N G lJ Nl P STHAUSS HAUER & PELDLLP ______ ... __ Atl6tMyS atlaw

VlA HAND DELIVERY Th~ Honorable Theodore H. Katz United States MagistTatc Judge United States Courthouse 500 Pearl Street New York, New York I 0007-131 2

November 2, 200~

Rc: United Stales v. Rnj Rajwatnam. eta/ No. 09-MAG-23.06

D.ear Magistrate Judge Katz:

SAMIOHGUHA (212) 872-10151fax: (212)872-8002

~uh~iun.Jompeom

We represent Defendant Raj Rajaratnam in connection with the above-mentioned matter. On October 29, 2009, we submitted a letter to Magistrate Judge Frank Maas, who served as the duty magistrate that day, requestiug reconsideration of the conditions ofMr. Rajaratnam's pre-trial release. We have been informed that Your Honor will hear this request on ThUJ'Sday, November 5, at 2:30pm. Enclosed LS a copy of our letter. previously :submtttcd to Magistrate Judge Maas, in support of our request for modification of Mr Rajaratnam's bail conditions. Thank you tor Your Honor's consideration of this request

Re.-p~ctfully Submitted,

Samidh Guha

Enclosure

cc: Joshua I. Klein (counsel for Government) ( via e-mail) Jonatha-n R. Streeter (counsel forGovomm

A K l N {) U M r;; STHAUSS HAUbB ,& FELD t.L I ----~~-.---- A~ts' Gt l{IW

VlA HAND DF.LlV.RY

'1 he Honcm:tbl~ Frunk Maas UuiLcd St~>g~.p t.ott.

We respectfu lly submit this letter on heh:l)f o f mrr client Raj Rajaratnam to request a d'-~-ft;}3St; tn ,\.-Jr. Rajarutnam's bond ro $25 million ((om its pn.-sent $100 million amount aod h> ret:}Uesl ..1 mouitfcation ofthe .c.fltlft\nt ~111k f N~ Ycorli . !NY 1003& r 't &72.10()0 If'~: ;t1~.872. f0Cl2 I w.~ . .,~lt-l)ttrllp.c:m., ROOetH>. SII?W$fl. BUildrJg I 1).13Nl!w H~lfllf'Sh!ti>AVI!(!Ue. N W . l W10~Jrl;ol.ol\. 0 C 200'Je1!'ie4 1 :40~ 8874()()0 118~ 2132881A2"~ /;Jl(~~>gU

i\.t~ I N Gl ' Ml' S I H .\ Ut.;ing persom~:J [md

profcssion~1 1 tics to che Unltdl States Mu the toc:1J C-Q.mmuuity that he has no int~ntion of ahiHldonmg - rn.cluding the presenc..-e ufhis cntir~ tmn\(~c:h3te family and nO'arfy $30 million worth uf real cstat~ Finally, Mr. RaJ~ratnam (eTllain:- act ively engaged m the business of Galleon and ~~ ~om&1litte wltile cnsurjng tlun GaJlconsinvestors and employees are freatcd t:1irlyand equitably it:1 the courbc o f winding dowu Gall

. \ K I ~

,\KI~ (, ,\IP ~ r H i\ u s s H :\ tJ ~~ n s. .~ c ' o , .

I ion. frank Ma~ti l)ctvher 29, 20(19 1\tg\: 4

million,

.-\ h 1 :-.: n t ~-t I' S r H 1\ US H H \ U I~ H & F 6- L I) l .t.l'

H

\KI.'! ld \11' s T H ; \ ~ ' '-i S' f I 1 \ I . E R s. F E I. f') I l I' ------ """'"' ho i..

,\ I~ l N C.1 ll M l., ~ ., H ,\ t ' s s H \ n r-;_ H .~ F P t o 1.1 ,.

llorL rrank Maas October 29,2009 Page 1

38;5 - 38~ I 0. Mr.. Rajal~tnairt kas t:uoperatcd fully with the "Prclri~t Supen is10n Offilw"t:t and infe11ds to cont1nue tD be fulty cooperaLiV gc;ing forward.

Mr. R.i.ljamuuun J\lsn rl'(llii.:StS that the Court ami!J\d the restrictions on his rnon':rn(~nl.:. 111 pcnmt him 10 lrnvcl wi(hin tho c.ontinental U1tited Stat~ Currently, Mr. R:tjaratnam 's llhJV~ftH~nr s are limit~d to witHin 110 mtle;) from New York City. a limitation 1hat wa..

In The Matter Of:

UNITED STATES OF AMERICA v. RAJ RAJRATNAM

November 5, 2009

HEARING

Original File 9B5KRAJH.txt, Pages 1-ll

Word Index included with this Min-U-Script

\

UNITED STATES OF AMERICA v. RAJ RAJRATNAM

(1] (2 ] (31 r 41 151

161

171 {8)

19] { 10] (11] (12) ( 13] 114) (151 1161

117) [ 181 (l!>J (20] (21) {12) (231 !24 I

(2~)

(1)

121

131

141

(5)

(6)

[11 181

[9 )

( 10)

lUI !121

{131 [14 )

[ 15]

[161 (l?l (181

[19!

1201 {21)

[221 123) [24 1 [25 )

9B!>K.P.l\Jll UNIT&D STA'tES DISTRICl' COURT SOUTH ERN DISTRI CT OF NEl-l YORK

~--------------------- --------x UNlT0 STATr.S OF AMERICA,

Page 1

'1 . 09 MAG 2 30 6 {THK)

Defendant .

------------------------------Y. NP.'-< Yo:ck, N.Y . NOVP~ber 5 , 2009

2 : 45 p.m.

Before: HON. THEODORS H. KATZ ,

Magitrate Judge

APP&l\P.ANCES

l?REET BllA.~AA United States Atorne~ for the JCSHU~o*L~f~n Di strict o! ,ew Yo:c~ _

JONATHAN STREE'I'E.R ANDREW MICHAELSON

Assistant United St

UNITED STATES OF AMERICA v. RAaJ RAJRA TNAM

(1)

12 1

\3) (4)

151 (6)

111 [8) (9 )

( 10) (Ill

(12) (131 lUI

Jl ! l (1(1)

(17) 1101

119) (20) [21) 122) [23) [ 2 4 )

(2!)

PageS

MR. Jl)OWir. !k'WM represented, your Honor, but be had about ten minutes with counsel. And he didn't really ha' e an opportunity to lay all these facts before the Court

So, y0ur Honor, I would ask,. u1 addition to the crinuoal complaint, in footnote 1 of paragraph 10 on page 10, the soura - it was not revealed that the source had a cnminal conviction, it was not revealed that the source had also fabricated evidence before a U.S. District Court in August of2009. All rm saying is, there's an issne about the credil)iljty o f this complaint. But I just want you to know that from his standpoint, be's not going anywhere. Now, everything is at stake. He's ~dthe records. We believe the rerords wilt be powerful and helpful in trying this case.

What l'd ask you, your Honor, is to give us more leeway oo the travel restrictions. In addition to coming to my office in Washington, which would be very helpful, we've got three cases to try; we're already under way with Judge Rak:off. And, your Honor, we'd be happy to report, Mr. Santos, who's the pretrial services officer, has to travel. In addition, it would be helpful if he bad the ability to travel in the United States so thac he could help sell- save the business. But we're happy to report and account where he's going, why be's going, etcetera.

The only other point rd suggest, your Honor. is I

PageS

111 just thmk I 00 1IUlhon is too much; it's oot necessary for this 121 defendant, with all the ties that he has hero. I'd ask your 131 consideration on that point. rl THE COURT: I mean he bas posted the security for the lSI bond? 16J MR. OOWO: He has posted the security, your Honor. l7l But given the fact that he's out of business, there's an awful tal lot of cash there that could be helpful in taking care of t91 liabilities. Your Honor, he is responsible for all tlle

11o1 liabilities of- and he's trying to meet them all in Galleon. 1u1 He doesn't want anybody to lose a nickel for this. He's not 1121 taking any fees, he's not taking anything for himself; be's llll trying to protect - so there's $2-l/2 million cash in this, 1u1 and I'd ask your H onor for consideration and some relief in t15l that department. 1u 1 THE COURT: Thank you. 1111 MR. DOWO: Your Honor, I want to mention something 11e1 else the government rajsed about the investment in Sri Lanka. !19l We really don't want rhe Court to be concerned about that 1201 First of aU, your Honor, tho vast majority ofthat is in stock 1211 in a public company, and we're happy to comrmt to the Court and 1221 the pretrial services officer that that's a long-term !231 investment that will not be disposed of. And if there's a need tzc 1 to dispose of it, we'll come to the Court fust and ask for r2s1 pemtission to do so. So there's not 25, 30 million dollars

{1) 121

{31 ((J

lSI

161

(1J [9)

{9 )

1101 [11)

(121 (13! (Hl lUI

(161 [17)

[18) (19 )

1201

{211 122) {2))

{241 [25)

November 5, 2009 Page 7

worth of cash. And what cash he has in Sri Lanka, he's bringing back here to help pay the vendors and other people the obljgations at Galleon. The balance will be stock on a public company but I want your Honor to know, 1 don't want anybody to be concerned that it's some fund over there that he could use to escape. He's not, and we're happy to be transparent about it and offer that

THE COURT: OK, thank you. MR. DOWD: Thank you, your Honor. MR. KLEIN: YourHonor-THE DEPUTY CLERK: lden.tify yourself. MR. KLEIN: Your Honor, Josh Klein on behalf of the

government Also seated at counsel table are Andrew Michaelson and John.athan Streeter from the U.S. Attorney's Office, and B.J. Kang from the FBl. Good afternoon, your Honor.

THE COURT: Good aftemoon. MR. KLEIN: Your Honor, I just want to clarify a

couple of things that defense counsel Jed with. First, we did have trading records that we obtained

from Galleon's client broker. Second, with respect to the SEC audit, that was the audit that uncovered the instant message from a cooperating witness to the defendant that said something to tile effect of, bold off on PLCM - which is the symbol for 'Polycom, one of the stocks charged in the complaint -until! get guidance. And we actually reference that [M --I don't

PageS

111 believe we indicate where it was obtained but we reference that 121 IM in the complaint. Ill With respect to the change of circumstances, we point tc 1 out in the government's brief the only change of circumstance !51 is the fact that Galleon, the defendant's company, is now being 161 wound down. And whatever the defendant may or may not be doing PI vis-a-vis Galleon's employees, to the extent that he refers to 111 Galleon as perhaps his life's most important work, or something IPJ to that effect, in his Jetter, that entity is being bound down.

uoJ Any ties that the defendant has to New York, by virtue of 1111 Galleon, are being unwound and are bemg weakened rathef' than 1121 strengthen~d. So in terms of a change in circumstance, if llll anything, we believe that the change in circumstance would tu 1 militate a strengthened ball package, not any reduction in the tl5l bail. 11,1 With respect to- I don't want to be repetitive of 1111 what's in the brief; ru just touch upon it very quicldy. 11e1 With respect to the defendant's ties to Sri Lanka, they go far 1191 beyond the 25 to 35 million dollars in the account that was 1201 referenced. He's reported in the press to be one of the 1211 biggest, if not the biggest, stakeholder in at least one or two 1221 of the biggest conglomerates in Sri Lanka. He was born and I2JI raised there. He has, according to the pretrial services 12" report, aunts, uncles, cousl.OS there. In tenns of his !251 international ties and this is also indicated in the

HEARING Min-U-Script {2) Page 5 - Page 8

UNITED STATES OF AMERJCA v. RAJ RAJRATNAM

P

UNITED STATES OF AMERICA v. RAJ RA.JRATNAM November 5, 2009 __ .:::::...:;:::::::..:::::..:..:::::.:__--r ______ --,-------.-----"-----,-- ----=--

back 7:2 $ bair 4:13,22;8: 14,15;~

---------l 20;l0:24;11:8 $2-112 6.1 3; 11:4 balance 7:3

- -----1 basis 9:18 1 behalf 7:12

- ---------1 behaved 4. 18 1 5:5 beyond 8: 19 1.3 9:7 biggest 8:21,21,22 1.8 9:8 billion 9.8,8 10 5.5,5 BJ 7: 15 100 6:1 bond 6:5 12~ 3:1,10 born 8:22 16th 3:3 bound 8:9 __ _,;;_ _____ --! brief 8:4,17,9:18

2 bringing 7:2 ----------1 broader 9:1 2007 4 :5 2009 59 25 6:25;8:19

3

broker 7:20 built 9:10 business 5:22;6:7; II :9

c

conviction 5:7 cooperating 7:22 cooperatMs-9.13

1-----------i instance 10:9,10 F instant 7:21

1----------1 instead 3.5 core 9: ll fabricated 5:8 counsel 3:8;5:2;7: 13,18 fact 3:9,21;6:7;8:5;9:5 couple 7:18 facts 5:3 -Court 4:18,21 ;5:3,8;619, family 3:1 21,24;10:9 fa r 8:18 COURT 3:23;4:9,12,16, FBI 7: 15;9:3 22,25;6:4,16;7:8,16,9:22; fee 3:7 10: 12,14,19,24; I 1:7,14,17 fees 6.12 cousins 8:24 few 320 create 9:6 first 3:4;6:24 credibility 5.10 First 6:20;7: 19 crimes 9:15 fl ight 9:6 criminal 3:12;55,7 footnote 5:5 critlcal3:14 framework 10:8 f----------j freezing 3:5

D fu nd 75

days 3:20 decisions 4:12

G

intends 10:17,19 international 8:25;9:2 investment 618,23 investors 3:8 issue 4.9;5:9 Issued 3:21 issues 4IO

J

jobs 3:11 Johnathan 7:14 Josh 7:12 Judge 3: 13,22,24;4: 12, 21 ;5; 18;9:21 ;1 0: 15; 11: I jury 3:20 .

K ----------1-----------1 defendant 4:13;6:2;7:22; Galleon 3: 1,4,7,15,19;

4:3,3,5;6.1 0;7:3;8:5,8,1 I Galleon's 7:20;8:7 given 6:7

Kang 7. 15 Klein 7:12 30 625

35 8: 19 Canada 9:4 capture 9: 15 care 6:8

A case 3:17;5:14,9:9,10,12 -----------1 cases 5:18 ability 5:21 cash 6:8, 13;7: 1,1; II :4 able 9:23 certainly 10: IS; I 1:13 a broa d 9:4 Certainly I 0:22 absolutely 10:22 cetera 4:2;5:24;9:4 according 8:23 change 8:3,4,12,13;9:19 account 5.23;8:19 changed 4:16,17 actually 7:25 charged 7:24 addition 3:5;4:21 ;5:4, 16, circumstance 8:4,12,13; 20 9:20 admitted 9:3 circumstances 3:9;8:3 advance 10:4,6,16;11: 10 clarify 7:17 advises 10:16;11:10 CLERK 7: 1 I afternoon 7:15,16 client 7:20 ago 11:1 coming 5:16 airplane 1 0:20; 11 11 commit 6:21 along I 0:8 communications 3: I 8 amount 11.1 company 36,10,21;6:21; analyst 3: I 7 7:4;8:5 Andrew 7:13 compelling 4:7 appears 4:1 complaint 3: I 2,13;4:1 ,6, application II : 14 l I ;5:5, I 0;7:24;82 argument 3:24 comprise 9:1 J around 9.10 concerned 6:19;7:5 arrest 3:20;9:3 concerns 9.23 assets 3:6 conditions II :8 assistance 3:8 conducted 4:5 attorney 9:24 conglomerates 8:22 Attorney's 7: 14 connections 9:5 aud it4.5;7:21,21 consensual 9:13 August 5:8 consideration 6:3,14 aunts 8:24 consult 9:23 awful 6:7 consulting II :9 =.:..::.:.....:..:..:..._ _____ 1 contact 1 0:5; II : 12

B contemporaneous 3:14, ----------------~ 16

HEARING

8:6, 1 0; 10:3 defendant's 8:5,1 8;9:7 defense 7: 18. department 6: 15 depending I 0:1 OEPUTY 7:11 detain 4:13

gives 11:10 Good 7:15,16 government 3:20;4:7; 6:18;7:13 government's 8:4;9:9,17 grand 3:20 guidance 7:25

H

KLEIN 7:10,12,17;9:25, 10:13;1 1:16

L

lanka 6: 18;7: 1 ;8: 18,22; 9:2 lawful4:18 lay 53 least 8:21 led 7:18

different 4:20 difficult 3:9 diminution 9:20 disclosed 3:22 dispose 6:24 dis posed 6:23 1----------1 leeway S: t6 Dls1rict 5:8 happy 5: 19,23;6:21 ;7:6; documents 3:4 11: 13 dollcll'$ 6:25;8: 19 hearing 4:22 DOWD 3:25;4:l0,15,17, heart 3:16 23;5:1;6:6,1 7;7:9;10:18, help 5:22;7:2 22; 11 :6,12, 15 helpful 5:13,17,21;6:8 down 3:7;8:6,9 himself 3:6;6:12

1-----=--...:.....----1 hold 7:23 E Honor 3:3, 12,25;4:6, 15,

1-------------1 21,23;5: I ,4, 15,19,25;6:6,9, Eaton 3:13,22,24;4:12,21; 14,17,20;7:4,9,10,12,15, 9:21;10: 15; I I :1 17;9: 17,25;10:2,13, 18,22;

letter 8.9 liabilities 6:9,10 life's 8:8 liquidating 3:7 lodged 3:14 long 10:16 long-term 6:22 looking II :2 lose 3:1 1;6:1 I lot 6:8 loyal 3:1

M effect 7:23;8:9 11 :6,13, 16 else 6:18;11 :14 .t-

1

--'---"------"1---------employees 31 ,9,10; I magistrate 4:8 4: 19;8:7 1------ - --- ---i majority 6:20 end 11 :2 Identify 7:11 making 3:23 enormous 9:8 IM 7:25;8:2 many 9:15 entity 8:9 important 8:8 may 8:6,6 escape 7:6 importantly 9:13 maybe II :2 et 4:2;5:24;9:4 indeed 4:4 mean 6:4 evidence 5:8-;9: 12 indicate 8:1 ;9: 1 8 meant 10: IS extenstve 9:2 indicated 8:25 meet 6: I 0 extent 8:7;10:2 indication 4:2 mention 6.17 extremely 9:9 information 10:2,6,6; message 721

I I: 12 Michaelson 7 13 inslder 9:12 might I 13

Min-U-Script (1} $2-1/2- might

UNITED STATES OF AMERICA v. RAJ RAJRA TN.AM:

militate 8:14 person 4:20 million 6:1,13,25;819; place 3: lli; lO:S l1 :4 PlCM 7:23 minutes 5:2 point 5:25;6.:3,8:3; 11 :8 modification 4: 14; 10:3 pointed 4:3 modify 10:24; 11:7,8 Polycom 7:24 monetary I 0:25 portrayed 4:20 months 9:15 position 9:17 more 5:15 positions 3: 19 most 4.18;8:8;9:1 3 post 9:3 much 6:1;9:1;11: 15 posted 6:4,6; II :4

powerful 5:13 N preclude 10: IS

preserved 3.5;5:12 necessary 6: I; 10:20 press 8:20 need 6:23 pretriai 'S:20;6:22;8:23; New &IO 9:1, 10:16;1 k i O nlcke16: 1 1 problem I 0: 12,23 none 10:23 property 9:3; I I :5 notice 11 :1 0 protect 3:6,8;6: 13 November I I :2 provide 11:12

0 public 6:21;7:3 purposes 11 :9

oath 3: 14 Q object 10:1,7,1 1 objection 1 0:10 quickly 8:17 obligations 7:3

R obtained 7:19;8:1 October 33 off 7:23 raised 6: 18;823 offer 7:7 Rajaratnam 4: 17; 10:16 office 5: 17 Rakoff 5: 18 Offlce 7:14 rattler 8: II officer 5:20;6:22 read 3:25;4:23 often 9:11 really 4:9;5:2;6:19; I 0:25 OK 7:8;11 :2 reason 10:20,25; 11:7 one 4: I 0;7:24;8:20,fl; reasonable 10:14 11 :2 recall I 1:1 only 5:25;8:4;9: I 0 reconsider II :3 opportunity 5:3;9:6;10:1, record 4:24 7, 11 recordings 9:14,14 oppose 10:8 records 3:5,15,16,17;4:1, opposed I 0:8 3,5, 19;512,13;7:19;9: I 1, order 34;10:3 I 1 out 4:3;6:7;8:4 reduction 8: 14;9: 19 outlined 10.8 reference 7:25:8:1 over 7:5;9: 14 referenced 820 overseas 96 refers 8:7 overwhelming 4:7 registered 44 owns 9:3 released 3:3

relief 6.14 p rely 3:23 relying 4:1

package 8: 14;9:19; 10:8 repetitive 8:16 page 5:5 report 5: 19,23;8:24;9: I paragraph 5:5 reported 8:20;9:7 pay 7:2 reports 3: 17 people 4:20;7:2 represented 4:25;5 1 perhaps 8:8 request 10: 14 period 9: I 5; 10:5 require I 0:3 permission 6:25 resources 9:7 permit 1 0:24 respect 4:19;7:20;8:3,16,

HEARING

November S, 2009

18;9:25 travel 516,20,21 ;9:2,23, responsible 6:9 25; 10:4,4,5,7,10,17,19; rest 11!4 I I :8 restrictions 5:16 try 5:18 \. revealed 5:6,7 trying 3:10;5:13;6 10,13 revisit 10:25 turn 3:12 right J 1:5 two 8:2J;ll: l

s u

Santos 5:19 UK 9:4 save 5:22 uncles 8:24 saying 5:9 uncovered 7:21 seated 7:13 under 3:l 4;5:18 SEC 4:4,4;7:20 unfolding 9:16 Second 720 United 5:21 ; 10: 17 security 6:4,6; 115 unwound 8:11 seeking 4:13 upon 8:17 seems 10:14 use 7:5 seli 3: IO;S22 services 5:20;6:22;8:23; v 9:1; 10:16 set 9:21 .. vast6:20 Singapore 9:4 vendors 3:8:7:2 sort 9:20 virtue 8:10 sought 3:19 vis-a-vis 8:7 soul 3:17 voluntarily 44 source 5:6,6, 7

w Sri 6: 18;71 ;8: I 8,22;9:2 stake 5:12 stakeholder 8:21 wants 10:3 . standpoint 5: II warrants 9:20 States 5:22; 10:17 Washington 5:17;9:23 stock 6:20;7:3 way 4:18;5:18; 11 t2 stocks 7:24 weakened 8: 11 Streeter 7:14 weeks 11:1 strength 4: 1 0;9:9 welcome 1117 strengthened 8: 12,14 what's 4:16;8:17 stretch 9: 14 who's 519 strong 9:9 willing I 1 :3 subpoenaed 3:21 winding 3:6 suggest 4:6;5:25 wiretap 9:14 surrounding 3:18 within 10:17 symbol 7:23 without 3:7,14

witness 7:22 T work 8:8

worth 7:1 table 7:13 wound 8:6 talking 9:1 0 telephone 9: I I y ten 5:2 terms 8:12,24 York 8:10 three 5:18 tickets 10:21;11:11 ties 6:2;8: 1 0, 18,25;9: 2 today 4:9 took 3 16 touch 8:1 7 trades 3:18 trading 3:15,17,18;4:1; 7:19;9: 10,12 transactions 3: 15 transparent 7:6

Min-U-Script (2) militate - York

AU

DEFENDANT'$

o DETENTION 0 CONSENT ICE ' D D.E~f~JI.QN HE:'\lM,JiilG ,_~CH[DULED AT DEF~N 0 A

Approved :

Ass istant uni~ed states AOt.to~yMAG 2 3 0 6 ANDREW MICHAELSON . 't' Special Assistant United States Attorney

Before: THE HONORABLE DOUGLAS F. EATON United States Magistrate Judge Southern Di strict of New York

- - -- ------ ---- ---- X

UNITED STATES OF AMERICA COMPLAINT

Violations of -v . -

RAJ RAJARATNAM, RAJIV GOEL, and ANIL KUMAR I

Defendants.

SOUTHERN DISTRICT OF NEW YORK, ss.:

X

18 u.s.c. 371; 15 u.s.c. 78j(b}, 78ff; 17 C.F . R. 240.10b-5 and 240.10b5-2

COUNTY OF OFFENSE : NEW YORK

B. J. KANG, being duly sworn, deposes and says that he is a Special Agent with the Federal Bureau of Investigation and charges as follows :

COUNT ONE

(Conspiracy)

1. From at least in or about January 2006 up to and including in or about July 2007, i n the Southern District of New York and elsewhere, RAJ RAJARATNAM, the defendant, and others known and unknown, unlawfully, willfully, and knowingly did combine , conspire, confederate and agree together and with each other to commit offenses against the United States, to wit, securities fraud, in violation of Title 15, United States Code, Sections 78j (b) & 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5 - 2.

2. It was a part and object of the conspiracy that RAJ RAJARATNAM, the defendant, and others known and unknown ,

unlawfully , willfully and knowingly, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, and of the mails, and of facilities of national securities exchanges, would and did use and employ, in connection with the purchase and sale of securities, manipulative and deceptive devices and contrivances in violation of Title 17, Code of Federal Regulations, Section 240.10b-5 by: (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made , in the light of the circumstances under which t hey were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would operate as a fraud and deceit upon persons, all in violation of Title 15, United States Code, Sections 78j (b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5 -2.

Overt Acts

3. In furtherance of the conspiracy and to effect the illegal objects thereof, the following overt acts, among others, were committed in the Southern District of New York and elsewhere:

a. On or about January 9, 2006, an individual who subsequently became a cooperating witness (the "CW") sent the following instant message to RAJ RAJARATNAM, the defendant, in New York, New York: "donot [sic] buy plcm till i het [sic] guidance; want to make sure guidance OK."

b. On or about January 12, 2006, in New York, New York, RAJARATNA!1 caused the Galleon Technology Funds to purchase approximately 60,000 shares of Polycom, Inc., which traded under the symbol "PLCM."

c. On or about July 3, 2007, in New York, New York, RAJARATNAM caused the Galleon Technology Funds to purchase approximately 400,000 shares of Hilton Hotels Corp., which traded under the symbol "HLT."

d. On or about July 17, 2007, in New York, New York, RAJARATNAM caused the Galleon Technology Funds to purchase approximately 1,000 put options in Google, Inc . , which traded under t he symbol "GOOG 1 rt and to short approximately 25,000 shares of Google stock.

(Title 18, United States Code, Section 371.)

2

COUNT TWO (Conspiracy )

4. From at least in or about March 2008 up to and including in or about October 2008, in the Southern District of New York and elsewhere, RAJ RJ1.JARATNAfv1 and RAJ I V GOEL, the defe ndants, and others known and unknown, unlawfully , willful l y , and knowingly did combine, conspire, confederate and agree t oge t her and wi th each other to commit 'offenses against the United

. States/ to wit , securities fraud, in violation o f Title 15, United States Code, Sections 78j(b) & 78ff, and Title 17, Code of Federal Regulations / Sections 240.10b-5 and 240.10b5-2 .

5. It was a part and object of the conspiracy that RAJ RAJARATNAM and RAJIV GOEL, the de(endants, and others known and unknown, unlawfully, willfully and knowingly-, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, and of the mails, and of facilities of national securities exchanges, would and did use and employ, in connection with the purchase and sale of securities, manipulative and deceptiv e dev ices and contrivances in violation of Title 17 , Code of Federal Regulations, Section 240.10b-5 by: (a) employing devices, schemes and artifices to defraud; (b} making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in the light of the cin:::umstances under which they were made, not misleading; and (c) engaging in acts 1 practices and courses of business which operated and would operate as a fraud and deceit upon persons, all in violation of Title 15, United States Code, Sections 78j (b) and 78ff, and Title 17, Code of Federal Regulations , Sections 240.10b-5 and 240.10b5-2.

Overt Acts

6. In furtherance of the conspiracy and to effect the illegal objects thereof , the following overt acts, among others, were committed in the Southern District of New York and elsewhere:

a. On or about March 20, 2008, a call was made from a landline subscribed to RAJIV GOEL, the defendant, to a cell phone used by RAJ RAJARATNAM , the defendant.

b. On or about March 24, 2008 , in New York, New York , RAJARATNAM caused the Galleon Technology Funds to purchase approximately 125,800 shares of Clearwire Corporation ("Clearwire"), which traded under the symbol "CLWR."

(Title 18, United States Code , Section 371.)

3

COUNT THREE

{Conspiracy) 7. From at least in or about July 2008 up to and

including in or about October 2008, in the Southern District of New York and elsewhere, RAJ RAJARATNAM, the defendant, and others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate and agree together and with each other to commit offenses against the United States, to wit, securities fraud, in violation of Title 15, United States Code, Sections 78j (b) & 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5 - 2.

8. It was a part and object of the conspiracy that RAJ RAJARATNAM, the defendant, and others known and unknown, unlawfully, willfully and knowingly, directly and indirectly, by the use of means and instrumentalities of interstate commerce, and of the mails, and of facilities of national securities exchanges, would and did use and employ, in connection with the purchase and sale of sec'urities, manipulative and deceptive devices and contrivances in violation of Title 17, Code of Federal Regulations, Section 240.10b-5 by: (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would operate as a fraud and deceit upon persons, all in violation of Title 15, United States Code, Sections 78j(b} and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2.

Overt Acts

9. In furtherance of the conspiracy and to effect the illegal objects thereof, the following overt acts, among others, were committed in the Southern District of New York and elsewhere:

a. on or .about July 24, 2008, a co-conspirator not named as a defendant herein ("CC-1"} called RAJ RAJARATNAM, the defendant, from New York, New York.

b. On or about July 25, 2008, in New York, New York, RAJARATNAM caused the Galleon Technology Funds to sell short approximately 138,550 shares of Akamai Technologies, Inc. stock, which traded under the symbol "AKAM."

(Title 18 , United States Code, Section 371. )

4

COUNT FOUR (Conspiracy)

10. From at least in or about August 2008 up to and including in or about October 2008, in the Southern District of New York and elsewhere , RAJ RAJARATNAM and ANIL KUMAR, the defendants, and others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate and agree together and with each other to commit offenses against the United States, to wit, securities fraud, in violation of Title 15, United States Code, Sections 78j(b) & 78ff, and Title 17, Code of Federal Regulations, Sections 240 . 10b-5 and 240.10b5-2.

11. It was a part and object of the conspiracy that RAJ RAJARATNAM and ANIL KUMAR, defendants, and others known and unknown, unlawfully, willfully and knowingly, directly and indirectly, by the use of means and instrumentalities of interstate commerce, and of the mails, and of facilities of national securities exchanges, would and did use and employ, in connection with the purchase and sale of securities, manipulative and deceptive devices and contrivances in violation of Title 17, Code of Federal Regulations, Section 240.10b-5 by: (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would operate as a fraud and deceit upon persons, all in violation of Title 15, United States Code, Sections 78j (b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2.

Overt Acts

12 . In furtherance of the conspiracy and to effect the illegal objects thereof, the following overt acts, among others, were committed in the Southern District of New York and elsewhere:

a. On or about August 15, 2008, ANIL KUMAR, the defendant, spoke with RAJ RAJARATNAM, the defendant, on RAJARATNAM' s cell phone.

b. On or about August 15, 2008, in New York, New York, RAJARATNAM caused the Galleon Technology Funds to purchase approximately 2,100,100 shares of Advanced Micro Devices, Inc . ("AMD"), which traded on the New York Stock Exchange under the symbol "AMD."

(Title 18, United States Code, Section 371.)

5

COUNTS FIVE THROUGH THIRTEEN

(Securities Fraud)

13. On or about the dates set forth below, in the Southern District of New York and elsewhere, RAJ RAJARATNAM, RAJIV GOEL, and ANIL KUMAR, the defendants, unlawfully, willfully and knowingly, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, and of the mails and of the facilities of national securities e xchanges, in connection with the purchase and sale of securities, did use and employ manipulative and deceptive devices and contrivances, in violation of Title 17, Code of Federal Regulations, Section 240.10b-S, by (a) employing devices, schemes and artifices to defraud; (b)

making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would operate as a fraud and deceit upon persons, to wit, RAJAP~TNAM caused the Galleon Technology Funds to execute the securities transactions listed below in the securities of (1) Clearwire based on material, nonpublic information he obtained from GOEL; (2) AMD based on material, nonpublic information he obtained from KUMAR and CC- 1; (3 ) Akamai, based on material, nonpublic information he obtained from CC-1; and (4) PeopleSupport based on material, nonpublic information he obtained from a source at the company.

couwr DEFENDANT(S) DATE SECURITY TRANSACTION

FIVE RAJARATNAM March 24, Clearwire purchased GOEL 2008 (CLWR) 125,800

shares

SIX RAJARATNAM March 25 , Clearwire purchased GOEL 2008 (CLWR) 136,000

shares

SEVEN RAJARATNAM July 25, Akamai sold short 2008 (AKAM) 138,550

shares

EIGHT RAJARATNAM July 29, Akamai sold short 2008 (AKAM) 173,300

shares

6

NINE RAJARATNAM J uly 30, Akamai sold short 2008 (AKAM) 86,650

shares and purchased 1, 400 put options

TEN RAJ ARATNAM August 15, AIIJD (AMD) purchased KUMAR 2008 2,100,100

shares

ELEVEN RAJARATNAM August 18, AMD (AMD) purchased KUMAR 2008 2,800,100

shares

TWELVE RAJAP.A TNAM September AMD (AMD) purchased KUMAR 30 , 2008 375,000

shares

THIRTEEN RAJARATNAM October 7, PeopleSupport purchased 2008 (PSPT) 30,000

shares

{Title 15, Uni t ed States Code, Sections 78j{b) & 78ff; Title 17, Code of Federal Regulations,

Sections 240.10b-5 and 240.10b5-2, and Title 18, United States Code, Section 2. )

The basis for my knowledge and the foregoing charges is , in part, as follows:

14 . I have been a Special Agent with the Federal Bureau of Inv estigation for approximately fiv e years . I am currently assigned to a squad responsible for investigating v iolations of the federal securities laws and related offenses. I have participated in numerous investigations of such offenses and I have made and participated in making arrests of individuals for participating in such offenses.

15. The information contained in this affidavit is based upon my personal knowledge, as well as information obtained during this investigation, directly or indirectly, from other sources , including, but not limited to: {a) information provided to me by the United States Securities and Exchange Commission (the "SEC"), which includes information and documents obtained from other ent ities including Galleon Management , L.P., Intel Corporation (" Intel"), and Poly com, Inc. ( "Polyc om"), among others; (b) publicly available documents ; {c ) information provided to me by the CW; and (d) court-authorized wiretaps on

7

certain telephone lines, as is further described below. Because this affidavit is prepared for limited purposes, I have not set forth each and every fact I have learned in connection with this investigation. Where conversations and events are referred to herein, they are related in substance and in part unless indicated otherwise. Where figures and calculations are set forth herein, they are approximate.

Relevant Entities and Individuals

16. Based on information obtained from the SEC, documents publicly filed with the SEC, public announcements made by certain of the entities ident i f i ed below, court-authorized interception of certain wire communications, and information available to the public over the Internet, I am aware of the following:

a . At all times relevant to this Complaint, the Galleon Group ("Galleon") operated a family of hedge funds based in New York, New York, that included, among others, the Galleon Technology Funds. At all times relevant to this Complaint, Galleon Management L.P., of which RAJ RAJARATNAM, the defendant, was a partner, operated as the General Manager of the Galleon Technology Funds. Based on public reports, I believe that the Galleon Group has or has had as .much as $7 billion in assets under management .

b. At all times relevant to this Complaint, RAJARATNM~ served as the portfolio manager for the Galleon Technology Funds and was responsible for directing trading in those funds.

c. At all times relevant to this Complaint, RAJIV GOEL, the defendant, was employed by Intel Capital, the investment arm of Intel, as a Director in Strategic Investments.

d. At all times relevant to this Complaint, ANIL KUMAR, the defendant, was employed as a Director by McKinsey & Company, Inc. ("McKinsey"), a global management consulting firm.

I n sider Trading Scheme

General Overview

17. Based on all of the sources of information referenced herein, including all of the facts and circumstances described in detail below, I have p r obable cause to believe the following:

8

a. From at least in or about January 2006 through in or about July 2007, RAJ RAJARATNAM, the defendant, the CW, and o thers known and tmknown, participated in a scheme to defraud by disclosing material, nonpublic information (the "Inside Information") and/or executing securities transactions based on Inside Information pertaining to at least the following three publicly traded companies: Polycom, Hilton Hotels Corp. ("Hilton") and Google Inc. ("Google"). The means by which RAJARATNAM and the CW effectuated the fraudulent scheme were as follows : The CW obtained Inside Information regarding Polycom, Hilton and Google from various sources who disclosed the Inside Information in violation of duties of trust and confidence. The CW communicated this Inside Information to RAJARATNAM, who caused the Galleon Technology Funds to execute securities transactions on the basis of this Inside Information, earning a total profit of more than $12.7 million from the scheme. In exchange, RAJARATNAM provided the CW with Inside Information regarding other technology companies.

b. From at least in or about March 2008 through in or about October 2008, RAJ RAJARATNAM and RAJIV GOEL, the defendants, and others known and unknown, participated in a scheme to defraud by disclosing Inside Information and/or executing securities transactions based on Inside Information pertaining to at least Clearwire, a publicly traded company. The means by which RAJARATNAM and GOEL effectuated .the fraudulent scheme were as follows: GOEL obtained Inside Information regarding investments made by his employer, Intel Capital, including an investment made by Intel Capital in Clearwire in or about the spring of 2008. GOEL provided this Inside Information to RAJARATNAM in violation of duties of trust and confidence owed to Intel Capital. RAJA.RATNAM then caused the Galleon Technology Funds to execute securities transactions on the basis of this Inside Information, earning a total profit of approximately $579,000 from the scheme. In exchange, RAJARATNAM placed profitable trades for the benefit of GOEL in a personal brokerage account maintained by GOEL at Charles Schwab. For example, as discussed further below, in or about October 2008, RAJARATNAM executed a profitable trade in PeopleSupport stock in GOEL's personal brokerage account based on Inside Information that RAJARATNAM learned from his colleague at Galleon who sat on PeopleSupport's Board of Dire ctors.

c. From at least in or about July 2008 through in or about October 2008, RAJ RAJARATNAM, the defendant, CC-1 and others known and unknown, part icipated in a scheme to defraud by disclosing Inside Information and/or executing securities transactions based on Inside Information pertaining to at least

9

the following two publicly traded companies: Akamai and AMD. The means by which RAJARATNA.t1 and CC-1 effectuated the fraudulent scheme were a.s follows: RAJARATNAM and CC-1 obtained Inside Information regarding Akamai and AMD from various inside sources who disclosed the Inside Information in violation of duties of trust and confidence. CC-1 communicated Inside Information regarding Akamai to RAJARATNAM. In addition, RAJARATNAM and CC-1 provided one another with Inside Information regarding AND. RAJARATNAM caused the Galleon Technology Funds to execute securities transactions on the basis of this Inside Information, earning a total profit of approximately $3.5 million from the scheme.

d . From at least in or about August 2008 through in or about October 2008, RAJ RAJARATNAM and ANIL KUMAR, the defendants, and others kno~;.'!l and unknown, participated in a scheme to defraud by disclosing Inside Information and/or executing securities transactions based on Inside Information pertaining to at least AMD. The means by which RAJARATNAM and KUMAR effectuated the fraudulent scheme were as follows: KUMAR obtained Inside Information regarding certain of McKinsey's clients, including N~D. K~ communicated the Inside Information regarding AMD to RAJARATNAM in violation of duties of trust and confidence mved to McKinsey and its clients. RAJARATNAM then caused the Galleon Technology Funds to execute securities transactions based on the Inside Information. KUMAR stood to benefit from RAJARATNAM's trading because he was a direct or indirect investor in one or more hedge funds affiliated with Galleon.

The CW's Interactions with RAJARATNAM

18. Beginning in or about November 2007, I and other FBI agents have had numerous discussions with the CW, an individual who subsequently began cooperating with law enforcement. 1 As discussed further below, the CW's cooperation included making consensual recordings of four telephone conversations between the CW and RAJ RAJARATNAM, the defendant.

The CW is an individual who executed securities transactions based on material, nonpublic information . The cw has agreed to plead guilty to charges of conspiracy and securities fraud in connection with this conduct and to cooperate with the Government in the hope 9f receiving a reduced sentence. The CW has been cooperating with the FBI since in or about November 2007. The information the cw has provided has been corroborated by, among other things, trading records, pen register data, and telephone records.

10

Based on a review of trading records and other documents, the consensually recorded telephone conversations between the CW and RAJARATNAM, as well as information provided by the CW, I believe that since at l east in or about 2006, RAJARATNAM and the CW participated in an insider trading scheme in which RAJARATNAM and the cw provided to one another Inside Information that each of them had received from other sources, to enable one another to execute trades based on that information. The CW provided RAJARATNAM with Inside Information regarding various publicly traded companies, including, among others, Polycom, Hilton and Google. In exchange, RAJARATNAM provided the CW with nonpublic earnings information on a number of companies, including, but not limited to, Intel . After receiving the Inside Information relating to Polycom, Hilton and Google, RAJARATNAM executed trades in the respective securities of those companies.

19. Based on my discussions with the CW, I understand that, beginning in or about mid- 2005, the CW contacted RAJ RAJARATNAM, the defendant, to inquire a bout potential empl oyment at Galleon. 2 During one of their conversa tions, RAJARATNAM asked the CW to identify the companies concerning which the C\v had an "edge . " Based on the CW's previous relationship with RAJARATNAM, the CW understood RAJARATNAM to be asking the cw to identify the companies from which, or about which, the CW was able to r eceive Inside Information. RAJARATNAM had previously told the cw that he had inside sources at various companies including Intel. RAJARATNAM told the CW that he received Inside Information about these companies. In an effort to secure employment at Galleon, the CW told RAJARATNN4 that s/he had an edge on Polycom. At that time the CW was associated with a Polycom executive (the "Polycom Executive") who had previously provided the CW with Inside Information about Polycom's quarterly earnings results.

20 . Based on my discussions with the cw, I understand that in a series of subsequent conversations with RAJ RAJARATNAM, the defendant, in or about 2006 and 2007, the cw provided RAJARATNAM with Inside Information, including information on Polycom, Hilton and Google. In exchange, RAJARATNAM provided the CW with Inside Information on a number of companies.

Interception of Wire Communications

21. In connection with the invest igation, on or about March 7, 2008, and on certain dates thereafter, the FBI obtained

2 The CW has known RAJARATNAM since in or about the rnid-1990s in connection with the CW s prior employment.

11

court orders authorizing interception of communications over a cell phone used by RAJ RAJARATNAM, the defendant (the "Rajaratnam Cell Phone''). As discussed further below, a number of the intercepted calls consist of RAJARATNAM either providing, receiving, or seeking Inside Information about various publicly traded companies. 3

22. Also in connection with the investigation, on or about August 13, 2008, and then again on September 12, 2008, the FBI obtained court orders authorizing interception of communications over (i) a landline used by CC-1 ( "CC-1 Landline A"); (ii) a second landline used by CC-1 ("CC-1 Landline B"); and (iii) a cell phone us.ed by cc-1 (the "CC-1 Cell Phone;" cc-1 Landline A, CC-1 Landline B and the CC-1 cell Phone are referred to, collectively, as the "CC-1 Phones"). As discussed further below, a number of the intercepted calls consist of CC-1 either providing, receiving, or seeking Inside Information about various publicly traded companies.

Insider Trading in the Securities of Polycom

23. Based on my review of documents provided by Polycom, I have learned that, at all times relevant to this Complaint, the Polycom Executive was employed by Polycom. Polycom's "Insider Trading Policy," which applies to all employees, officers and directors of Polycom, among others, provides that "the disclosure of material nonpublic information to others who then trade in [Polycom] 's securities, is prohibited by the federal and state securities laws. 11 The policy further provides: "No Insider shall disclose (' t i p') Material Nonpublic Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates . . . . " The policy provides that information may be "Material Nonpubl ic Information" if "there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the company's Securities." The policy further provides examples of such information, including : "(f]inancial results" and "[p]rojections of future revenues, earnings or losses, or other earnings guidance . "

The summaries of the intercepted calls that are set forth in this affidavit are based on prelimina.ry draft transcripts prepared from the recordings, which I have reviewed and which are subject to revision.

12

.

24. Based on my review of documents obtained from Polycom, I have learned that in late December 2005 and early January 2006, the Polycom Executive obtained Inside Information relating to Polycom's revenue for the quarter ending on December 31, 2005, and the company's sales forecasts of anticipated bookings (the "Polycom Inside Information").

25. Based on conversations with the CW, I have learned that in or about January 2006, the Polycom Executive related Polycom Inside Information to the CW. Specifically, the Polycom Executive informed the CW that Polycom's revenue for the quarter ending December 31, 2005 was strong. When told what analysts' expectations were for Polycom's revenue for the quarter ending in December 2005, the Polycom Executive told the CW that Polycom would beat analysts' expectations.

26. The CW informed me that the Polycom Executive provided the Polycom Inside Information to the CW because the two were friends, and because the Polycom Executive anticipated that the CW would repay the CW for money that the CW had lost executing securities transactions in the Polycom Executive's personal brokerage account.

27. Based on conversations with the CW, I have learned that in or about January 2006, the CW provided the Polycom Inside Information that s/he had obtained from the Polycom Executive to RAJ RAJARATNAM, the defendant. Specifically, the CW informed RAJARATNAM that Polycom's revenue for the quarter ending December 2005 was going to be good and that guidance regarding its performance in the quarter ending in March 2006 would be good. The CW also indicated to RAJARATNAM that s/he had a source at Polycom.

28. Based on my review of documents provided by Galleon, Instinet (an electronic securities market for institutional investors), Galleon's prime broker, and certain telephone records, I have learned the following:

a. On or about January 9, 2006, at approximately 2:47 p.m., 4 the cw sent the following instant message to RAJ RAJARATNAM, the defendant: "donot (sic] buy plcm till i het [sic] guidance; want to make sure guidance OK." Based on conversations with the CW, I learned that the CW meant that RAJARATNAM should not buy Polycom stock until the CW obtained material, nonpublic

4 Unless otherwise noted, all times that appear throughout this Complaint are reflected in Eastern Standard Time.

13

information regarding the guidance that Polycom planned to announce regarding its anticipated performance for the quarter ending in March 2006.

b. On or about January 10, 2006, at approximately 10:59 a.m., a telephone call was made from a cell phone subscribed to the CW to the Rajaratnam Cell Phone, which lasted one minute.

c. On or about January 10, 2006, at approximately 11:43 a.m., RAJ RAJARATNAM, the defendant 1 caused the Galleon Technology Funds to purchase 7 1 500 shares of Polycom stock at an average price of $16.70 per share .

d. On or about January 11, 2006, at approximately 6:01p.m. Pacific Time r a telephone call was made from a cell phone used by the Polycom Executiv e (and subscribed to Po lycom) to the CW' s home phone/ la~.ting approximately six minutes.

e. On or about January 12, 2006, at approximately 10 : 30 a.m., the CW sent the following instant message to RAJ RAJARATNAM, the defendant: "hi; u there?"

.

f . On or about January 12, 2006, at approximately 10:33 a.m. 1 RAJARATNAM sent the following instant message to a trader for the Galleon Technology Funds: "buy 60 PLCM." Based on my rev iew of account records pertaining to the Galleon Technology Funds, and my understanding that "PLCM" is the trading symbol for Polycom1 I believe that RAJARATNAM was instructing his trader to purchase 60,000 shares of Polycom for the Galleon Technology Funds.

g. Between on or about January 11, 2006 and on or about January 25, 2006 1 RAJARATNAM caused the Galleon Technology Funds to purchase approximately 237,500 shares of Polycom stock at prices ranging from $l6.50 to $16.86 per share, as well as 500 February $17. 50 call options5 in Polycom for a total price of approximately $38,000 .

5 A "call option" gives the purchaser the right to buy a certain number of shares (typically 100 shares) of an underlying security at a specified price, until the specified expiration date of the call option (typically the third Friday of a specified month). Thus, a "February $17.50 call option// in Polycom gives the purchaser of the option the right to buy 100 shares of Polycom stock from the seller of the option at a price of $17 . 50 per share, until the third Friday of Feb~uary.

14

29. Based on my review of public records and news reports, I have learned .that Polycom announced its quarterly earnings after the market closed on January 25, 2006 . Revenue for the quarter was $156.1 million, which beat analysts' expectations of $150.9 million. On the following day, Polycom's stock price opened at $18.30 per share, up approximately 8 percent ($1.32} over the previous day's close.

30. Based on my review of account records for the Galleon Technology Funds, I have learned that during the period from on or about January 26, 2006 to on or about February 15 , 2006, RAJ RAJARATNAM, the defendant, caused the Galleon Technology Funds to sell all of the Polycom shares and call options purchased by RAJARATNAM beginning on or about January 10, 2006, for a total profit of approximately $700,000.

Insider Trading in the Securities of Hilton

31. Based on my training, experience, and review of public articles, I have learned that public companies retain credit ratings agencies ( "CRAs") such as Moody's Investors service, Inc. ("Moody's") to provide credit ratings. I have learned that public companies that retain CRAs entrust the CRAs and their employees with material, nonpublic information.

32. Based on documents provided by Moody's, I have learned that in 2007, an Associate Analyst employed at Moody's (the "Moody's Analyst") was involved in Moody's rating of Hilton. Based on my training , experience, and review of public articles, I believe that as an employee of Moody's, the Moody's Analyst owed duties of trust and confidence not to disclose for personal gain material, nonpublic information regarding Moody's and its clients.

33. Based on document s provided by Hilton and Moody's, I have learned that on or about July 2, 2007, at approximately 2:20p.m., certain executives of Hilton placed a phone call to a Vice President and Senior Analyst at Moody's who served as Moody' s Lead Analyst for its rating of Hilton. During the call, which l asted approximately seven minutes , the Hilton executives informed Moody's that Hilton would be acquired by the Blackstone Group LP ("Blackstone"), and that Hilton would likely announce the acquisition sometime before July 4, 2007 (the "Hilton Inside Information") .

34. Based on my conversations with the CW, I have learned that on or about July 2, 2007, the Moody's Analyst told the cw that Hilton was going to be taken private (meaning it would be acquired and thereby become a private company) the following

15

day at a price substantially above its publicly traded stock price.

35 . I have reviewed phone records from a telecommunications company for a cell phone used by the Moody's Analyst at all times relevant to this Complaint (the "Moody's Cell Phone"}. Consistent with what the CW told me, t hese phone records show that on or about July 2, 2007, at approximately 3:06p.m. , a telephone call was made from the Moody's Cell Phone to the CW's home phone, lasting approximately one minute. A second such call was made at approximately 3:10p.m . , lasting approximately two minutes. A third such call was made at approximately 3:14p.m., lasting approximately one minute.

36. Based on conversations with the CW, I learned that on or about July 2, 2007, the CW provided Hilton Inside Information to RAJ RAJARATNAM, the defendant. Specifically, the CW informed RAJARATN~~ that Hilton was going to be taken private and that it was a "sure thing." The CW informed RAJARATNAM that the source of the Hilton Inside Information was very good. The CW further informed me that RAJARATNAM understood that the CW was providing him with Inside Information.

37 . Based on my review of account records for the Galleon Technology Funds, I have learned that on July 3, 2007, RAJ RAJARATNAM, the defendant, caused the Galleon Technology Funds to purchase 400 , 000 shares of Hilton stock at an average price of approximately $35.13 per share.

38. Based on my review of public records and news reports, I have learned that on July 3, 2007, fo l lowing the close of the market, Hilton announced that it had agreed to be acquired by Blackstone for $20 .1 billion in cash, and that Blackstone had agreed to buy all outstanding shares of Hilton for $47.50 per share, representing a premium of approximately $10 per share.

39. Based on my review of account records for the Galleon Technology Funds, I learned that on July 5, 2007 and July 16, 2007, RAJ RAJARATNAM, the defendant, caused the Galleon Technology Funds to sell all 400,000 shares of Hilton stock, collectively, at prices ranging from $45 . 25 to $45 . 63 per share, for a profit of approximately $4 million.

40. Based on conversations with the CW, I learned that following the announcement that Blackstone would acquire Hilton, the CW arranged to pay the Moody's Analyst $10,000 in exchange for the Hilton Inside Information.

16

Insider Tradi ng in the Securities of Google

41. Based on my training, experience, and review of public news articles, I have learned that public companies retain third party investor relations firms such as Market Street Partners ("Market Street") to assist in preparing and distributing quarterly earnings announcement s and other press releases. I have learned that public companies that retain outside investor relations firms entrust the firms and their employees with material, nonpublic information.

42. Based on conversations with the CW and my review of public information available over the Internet, I have learned that during certain times relevant to this Complaint, the CW was in contact with an employee of Market Street (the "Market Street Employee"). Based on my training and experience, I believe that as an employee of Market Street, the Market Street Employee owed duties of trust and confidence not to disclose for personal gain material, nonpublic information regarding Market Street and its clients.

43. Based on documents provided by Google that I have reviewed, I learned that Google retained Market Street to provide investor relations services with respect to Google's earnings release for the quarter ending June 30, 2007. On or before July 2, 2007, Google communicated to Market Street certain material, nonpublic information regarding its performance for the quarter ending in June 2007 (the "Google Inside Information").

44. Based on my conversations with the CW, I learned that on or before July 12, 2007, the Market Street Employee communi cated the Google Inside Information to the CW by tel l ing the CW that Google's earnings per share for the quarter ending in June 2007 would fall below analysts' expectations. The Market Street Employee informed the CW that s/he was able to obtain this material, nonpublic information because Google was one of his/ her accounts at Market Street. The Market Street Employee provided the material, nonpublic information to the CW as part of his / her efforts to find hedge funds or other persons or entities willing to pay him/ her for Inside Information in the future.

45 . Based on conversations wi t h the CW, I have learned that in or about July 2007, the CW provided Google Inside Information to RAJ RAJARATNAM, the defendant, prior to Google's earnings announcement. The cw told RAJARATNAM that Google's earnings per share for the quar ter ending June 30, 2007 would be below analysts' expectations. The CW informed RAJARATNAM that the

17

source of the Googl e Inside Information was an individual who I

worked at an investor relations firm.

46. My review of phone records associated with the