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Giant fraud case director guilty Giant fraud case director guilty
(about 7 hours later)
Anil Kumar, a former director of McKinsey, the global management consulting firm, has pleaded guilty to fraud charges. Anil Kumar, a former director of global management consulting firm McKinsey, has pleaded guilty to fraud charges.
He says he made $2.6m (£1.6m) giving inside market information to one of America's richest men, Raj Rajaratnam.He says he made $2.6m (£1.6m) giving inside market information to one of America's richest men, Raj Rajaratnam.
The prosecution alleges a list of crimes, including that Mr Rajaratnam paid Kumar between $1.7-$2m for his tips. Prosecutors allege a list of crimes, including that Mr Rajaratnam paid Kumar between $1.7-$2m for his tips.
The sum includes a $1m bonus, paid after a technology company merger. Kumar entered the plea in a US District Court in Manhattan in a co-operation deal aimed at strengthening the government case against Mr Rajaratnam.
Kumar entered the plea in a US District Court in Manhattan in a co-operation deal aimed at strengthening the government's case against the billionaire hedge-fund operator Raj Rajaratnam.
Secret tip-offsSecret tip-offs
He is said to have made $19m from investments after Kumar, a former senior partner and director at McKinsey & Co fed him tips between March and July 2006 about the acquisition of ATI Technologies by Advanced Micro Device. The billionaire hedge-fund operator is said to have made $19m from investments after Kumar, a former senior partner and director at McKinsey & Co fed him tips between March and July 2006 about the acquisition of ATI Technologies by Advanced Micro Device.
But this week, John Dowd, Mr Rajaratnam's lawyer, said: "An analyst's prediction that AMD would acquire ATI was widely reported in the press more than seven weeks before the acquisition was announced."But this week, John Dowd, Mr Rajaratnam's lawyer, said: "An analyst's prediction that AMD would acquire ATI was widely reported in the press more than seven weeks before the acquisition was announced."
The government filed papers this week in Mr Rajaratnam's case to say they planned to file additional charges against him after learning about the $19m, which prosecutors say raises the amount Mr Rajaratnam made from illegal deals to at least $36m in profits.The government filed papers this week in Mr Rajaratnam's case to say they planned to file additional charges against him after learning about the $19m, which prosecutors say raises the amount Mr Rajaratnam made from illegal deals to at least $36m in profits.
Household namesHousehold names
He is free on $100m bail after his arrest in October on charges he led a massive insider trading ring that involved key executives at several US companies.He is free on $100m bail after his arrest in October on charges he led a massive insider trading ring that involved key executives at several US companies.
Raj Rajaratnam founded the Galleon Group. Forbes magazine has featured Mr Rajaratnam on one of its rich lists and estimated that he was worth $1.3bn.Raj Rajaratnam founded the Galleon Group. Forbes magazine has featured Mr Rajaratnam on one of its rich lists and estimated that he was worth $1.3bn.
Twenty one people, including employees of some of America's biggest companies, including IBM and Intel, have been criminally or civilly charged in the complex case involving at least two insider trading networks.Twenty one people, including employees of some of America's biggest companies, including IBM and Intel, have been criminally or civilly charged in the complex case involving at least two insider trading networks.