The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund by Anita Raghavan

Author:Anita Raghavan [Raghavan, Anita]
Language: eng
Format: epub
Tags: Finance, Business & Economics
ISBN: 9781455504039
Google: 2B6aulLqGhwC
Amazon: B008TUNLWM
Publisher: Business Plus
Published: 2013-06-04T00:00:00+00:00

Chapter Twenty-Seven

“I Played Him Like a Finely Tuned Piano”

In the summer of 2008, as Manhattan emptied out and New Yorkers left the city for their vacation homes in the Hamptons, Andrew Michaelson, the SEC lawyer on loan to the US attorney’s office, stayed tethered to his desk in a drab office overlooking the Metropolitan Correctional Center. His docket was full, and the FBI wiretap of Rajaratnam’s phone was producing new pieces of information.

Since May, the FBI agents manning the wiretap, who listened in to Rajaratnam’s cell phone from as early as 6 a.m. to as late as midnight, seven days a week, had noticed a new caller crackling across the telephone wires. Most of the calls the agents monitored were between men. Their conversations were typically all business with some predictable locker-room banter interspersed.

The new caller was a woman named Danielle Chiesi. Her conversations with Rajaratnam on his cell phone titillated, touching on everything from sex to sport. Trading corporate news, Chiesi once said, was “like an orgasm.” It soon became clear to the agents and Michaelson that she inhabited a world of powerful men whom she played off one another to make her living. Her galaxy of sources was so impressive that Rajaratnam could not ignore her.

On Thursday, July 24, Chiesi telephoned Rajaratnam at 9:18 p.m., shortly after she got off the phone with a family friend who worked as a senior executive in marketing at Akamai Technologies. Chiesi had learned that Akamai, which manages Internet traffic for companies, planned to give pessimistic guidance to Wall Street analysts when it unveiled its profits the following week.

On reaching Rajaratnam, Chiesi didn’t waste a moment in getting to the point.

“Please don’t fuck me on this,” she told Rajaratnam. “[Akamai] they’re gonna guide down.”

Chiesi was pleased with the way she had handled the call with her Akamai source. Instead of asking him directly about the company, she acted as if she didn’t care and started talking to him about their mutual family members.

“I played him like a finely tuned piano,” she declared.

It was then that the Akamai executive dropped the bombshell.

He said, “You know, oh by the way, we’re gonna guide down on Wednesday.”

By the summer of 2008, the headwinds buffeting the financial markets were getting stronger by the day. Trading stocks was treacherous, and surefire investments that months earlier would have worked out the way traders imagined were suddenly going askew. The markets were so unpredictable that fundamental forces that normally drove individual stocks were no longer a factor, superseded by the market’s seemingly capricious moves—down one day, up another.

Chiesi worked for New Castle Partners, and only four months earlier, she’d seen the unforgiving nature of Wall Street up close. Bear Stearns, which owned New Castle, nearly imploded. Many of Chiesi’s friends found themselves out of work after JPMorgan Chase took over Bear. The lucky ones, the ones who had managed to hang on to their jobs, saw a lifetime’s worth of savings vanish in weeks. Bear was the sort of

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