Third McKinsey exec named in Galleon case

A third McKinsey & Co. official was named in the insider-trading case centered on Galleon Group founder Raj Rajaratnam.

Former McKinsey executive David Palecek emerged in a series of recorded phone conversations between Rajaratnam and his younger brother, Rengen, who describes Palecek as “a little dirty.”

Rengen tells Rajaratnam that Palecek told him to buy AMD, citing a deal with Abu Dhabi to buy AMD’s manufacturing units.

When Rengen asked Palecek about what other stocks he would recommend, Palecek allegedly said, “You know, the problem is, all my best ideas are inside information.”

Rengen said he then “jokingly” told Palecek, “You know, that’s not a problem. I’m sure we can hire Melissa [Palecek’s wife] as a consultant for Galleon.”

Palecek allegedly said that he would “think about it.”

Palecek, who died last year of a staph infection, is the third McKinsey executive to be named in the investigation, along with Anil Kumar and former Goldman Sachs director Rajat Gupta.