Ex-Galleon portfolio manager testifies against Rajat Gupta
26 May 2012
Michael Cardillo, an ex-Galleon portfolio manager who has pleaded guilty to insider trading charges, has testified in the trial of former Procter and Gamble (P&G) board director Rajat Gupta as the trial over insider trading charges entered the fifth day.
Cardillo, who is now on the prosecution's side, said he had traded in the consumer giant's stocks in 2009 after learning that Raj Rajaratnam had a ''guy'' on the company's board.
Cardillo said he and two other portfolio managers sold short P&G stock on 29 January 2009, betting that its price would fall.
He said it was Rajaratnam's brother, R K Rajaratnam, also a fund manager in his brother's Gallion hedge fund, who tipped him to sell the stock, saying that P&G's ''organic growth'' was without much substance.
''I was told by R K that Procter & Gamble was expecting to come in 4 to 6 per cent but was actually going to come in lower at 2 to 4 per cent,'' Cardillo told the Manhattan federal court.
''He told me he was hearing from Raj's guy on the P&G board,'' Cardillo added.
