Today in Tech: Ex-Intel executive avoids jail in Rajaratnam case; Cloud factories

One of the defining images – even if it came to us in the form of words, and not as a photograph – of Raj Rajaratnam’s trial is that of Rajat Gupta calling the hedge fund manager seconds after a Goldman Sachs board meeting. But, most of Rajaratnam’s investments – and therefore most of the insider trading allegations – were in technology companies such as AMD, ebay, clearwire, ATI, Akamai and, of course, Intel.

Yesterday, a US court let go of a former Intel executive Rajiv Goel with a two year probation (and not 25 years in prison that insider trading could entail). His cooperation went beyond the ordinary assistance, the judge said. As in the case of Anil Kumar, Goel’s lawyers too characterized him as a honorable man who got sucked into crime by wily Raj Rajaratnam. “At Monday’s sentencing, David Zornow, a lawyer for Mr. Goel, called Mr. Rajaratnam a “master manipulator” and “clever seducer” who played his client “like a fiddle.”, New York Times wrote.

There’s a more straightforward reason, though. A Bloomberg story says: “After returning to the U.S. from India and landing a job at Intel in 2000, Goel said, he repeatedly turned to Rajaratnam for financial assistance. Rajaratnam loaned Goel $100,000 to buy a home in 2005 and another $500,000 the next year when he needed support for his ailing father, Goel said. Goel put the $500,000 in a Swiss bank and used a portion to fix his California home. He testified that he didn’t report the gift to the Internal Revenue Service.”

Check out this presentation made by a professor during Rajaratnam’s defense. He argued that the alleged insider tips were already in the public domain, and one could have made money by sifting through newspapers, magazines, websites etc.

A self-serving lesson: read newspapers and magazines. You will get all the information you want and you don’t need to pay thousands of dollars in bribes to ‘friends’.

In what promises to be a fantastic series NYTimes writes about the hardware underlying the cloud, and its impact on environment. Yesterday, I wondered if it’s ignoring opportunity cost, and today I came across a Wired story which says it’s missing the big advances happening in this space. The problem is the companies won’t say what they are: “For awhile, the big web companies simply threw servers at the problem, building out quickly and cheaply, but in the past few years, some of the most interesting and exciting innovations at Google and others have been happening quietly and out of the public’s view.” More..

The second story in that series is here.