Ex-McKinsey director testifies against Rajaratnam

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

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

Last year, 51-year-old India-born Kumar pleaded guilty to receiving USD 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 Rajaratnam made USD 19 million in illegal profits from the ATI tip off.

Kumar said that he was "proud" of the AMD`s strategy but "I violated everything in sharing it with Raj."

The prosecution yesterday also played phone conversations by Rajaratnam and his alleged co-conspirators collected through authorized wiretapping.

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 Rajiv Goel, a former Intel executive and Adam Smith, a Galleon portfolio manager.

The prosecution today also played a conversation between Goel and Rajaratnam.

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

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

On Wednesday, Dowd said that Kumar was now trying to pin his client and "get a free pass from the government."

Dowd has also told the jury that those witnesses who have pleaded guilty but not been sentenced are on a "leash" held by government prosecutors.