Former McKinsey director Anil Kumar has testified against his ex-Wharton classmate and Sri Lankan-born billionaire Raj Rajaratnam in the biggest insider trading case to hit US courts in decades.

“Rajaratnam kept asking me for that information and I felt that I owed him something given how much money he was paying me,” Mr Kumar told the jury on the third day of the trial.

The central question of the case is whether the Galleon Group founder earned $45 million by using the leaked confidential information.

Last year, 51-year-old India-born Kumar pleaded guilty to receiving $1 million to provide secret information to Rajaratnam from 2003 to 2009 including a tip off on the acquisition of ATI Technologies Inc by Advanced Micro Devices Inc.

Prosecutors allege Mr Rajaratnam made $19 million in illegal profits from the ATI tip off. Mr Kumar said that he was “proud” of the AMD’s strategy but “I violated everything in sharing it with Raj.”

The prosecution also played the phone conversations by Mr Rajaratnam and his alleged co-conspirators collected through authorised wiretapping.

Mr Rajaratnam, who is charged with 14 counts of security fraud and conspiracy, could face up to 20 years in prison if convicted. So far, 19 people have pleaded guilty in the case including Mr Rajiv Goel, a former Intel executive, and Mr Adam Smith, a Galleon portfolio manager.

The prosecution has also played a conversation between Mr Goel and Mr Rajaratnam.

Another Indian-American Mr Rajat Gupta, a former board member of Goldman Sachs and Procter & Gamble, was charged last week by the Securities and Exchange Commission for sharing confidential information with Mr Rajaratnam.

Mr Rajaratanam’s lawyer Mr John Dowd has asserted that Mr Kumar had hidden from McKinsey the money he received from Mr Rajaratnam for above-board consultations, and that Mr Kumar was guilty of tax evasion from the IRS for five years.

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