The Insider’s Guide To Insider Trading Raj Rajaratnam, co-founder of Galleon, grabbed most of the headlines this Lee met Longoria week, but he’s only one star in a galaxy of characters accused of insider trad- in 2009 and ing. This guide to the case, based on Justice Dept. and SEC complaints, shows later recorded their how information allegedly flowed between defendants and the firms where phone conversations they worked at the time. The arrows represent just some of the tips that led to for the FBI. specific charges. In 2008, Rajaratnam allegedly earned about $500,000 on Kumar’s tip about eBay’s planned layoffs. Rajaratnam allegedly earned THE EXPERT NETWORK $45 million on illegal tips. NETWORK Starting in November 2010, the Justice Dept. brought charges against persons The SEC has accused Gupta related to Primary Global Research, al- of repeatedly passing insider informa- leging the “expert networking” firm dealt tion to Rajaratnam, including tips in insider tips. The ring allegedly includes about Goldman’s earnings and Berkshire Hathaway’s $5 billion Samir Barai, founder of Barai Capital, who is said to have investment in the company. been born 96 percent deaf and to have taped conversa- tions because of his impairment. Also implicated is Donald Longueuil, a hedge fund manager and former Olympic Moffat’s tipoffs about IBM speed-skating hopeful, now famous for allegedly taking Investigators called helped his friend Chiesi apart hard drives with pliers and depositing the pieces in Hardin—the link be- THE GALLEON earn $715,000 for tween the Galleon and garbage trucks around Manhattan. NETWORK New Castle and avoid Goffer rings—“Tipper X.” Rajaratnam and five others $1.02 million in losses. Goffer referred to Hardin’s were arrested on Oct. 16, source as “The 2009. Here’s a rundown of Goose,” as in the some key players in his ring. goose who lays ZVI GOFFER’S Roomy Khan, among the first golden eggs. NETWORK to plead guilty, helped the FBI secure a wiretap on The former teenage beauty Goffer and other former Rajaratnam. Anil Kumar says the Galleon chief queen built sources at male- Galleon employees were paid him $1.75 million for confidential information dominated tech companies. part of a second wave of on McKinsey clients. In exchange for tips, government arrests in November 2009. Goffer Rajiv Goel let Rajaratnam trade on his behalf allegedly received tips from using nonpublic information, including a tip about Tom Hardin through Gautham Hilton’s takeover. Adam Smith said his conspiracy Shankar, making $329,000 off with Rajaratnam ran from 2003 to 2009. Mark the Hilton takeover tip. Goffer, Kurland, who traded on illegal tips from Danielle Arthur Cutillo, and Jason Chiesi, was sentenced to 27 months in prison and According to SEC papers, Goldfarb used disposable had to forfeit $900,000. Ali Hariri and Ali Far trad- Goffer was called “the Octopussy” phones to pass information ed tips, but Far made hundreds of thousands while because his tentacles reached about Ropes & Gray clients. Hariri made only $2,500. Deep Shah, declared a so many sources of inside After receiving a tip on the fugitive in November 2009, was located in Mumbai information. 3Com acquisition, Goffer broke his tippee’s phone in half and last March, but hasn’t replied to the SEC’s lawsuit. bit the SIM card. Franz Tudor reportedly aided prosecutors by secretly recording conversations with Goffer and Michael Kimelman.