Sat, Jul 4, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Jury finds Galleon founder Rajaratnam guilty, ex billionaire to face up to 25 years imprisonment

Thursday, May 12, 2011

Rajaratnam
Opalesque Industry Update - After 12 days of deliberation and more than two months of a grueling and sometimes emotional trial, a jury on Wednesday found former hedge fund manager and one-time billionaire Galleon founder Raj Rajaratnam guilty on all 14 counts of conspiracy and securities fraud, various media reports said.

Government prosecutors hail the verdict, which was announced in U.S. District Court in Manhattan, as a major victory in the fight against insider trading. The high-profile Galleon case has been at the heart of a federal crackdown against privileged information being traded, and traded on.

According to a report by the Los Angeles Times, government prosecutors accuse Rajaratnam of earning more than $50m trading on inside information given to him by his sources at some of the biggest corporations in the U.S., including Google, Hilton and Goldman Sachs.

Rajaratnam’s defense team failed to convince the jurors that the “tips” given to the hedge fund manager were already public information and that the success of his Galleon hedge fund was a product of legitimate research.

Defense lawyer John Dowd said Rajaratnam would quickly appeal the verdict.

Many Wall Street insiders believe the unanimous decision against Rajaratnam would send a strong message to hedge fund managers and traders who deal on insider tips. Bill Currier, a former government lawyer who now works at the law firm White & Case told the Los Angeles Times, "Anybody who is engaged in this conduct right now is likely turning it right off.” In a statement released after the verdict, U.S. Attorney Preet Bharara vowed that his office would "continue to pursue and prosecute those who believe they are both above the law and too smart to get caught."

Bharara said, "Rajaratnam was among the best and the brightest -- one of the most educated, successful and privileged professionals in the country. Yet, like so many others recently, he let greed and corruption cause his undoing. The message today is clear -- there are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have."

Sentencing will commence on July 29. Rajaratnam is facing up to 25 years imprisonment but prosecutors say he could get between15.5 and 19.5 years in prison under federal sentencing guidelines. Rajaratnam is free on bail until the sentencing.

Big names dragged into Galleon case
The controversial Galleon trial dragged some of the biggest names in the corporate world and showed cracks in government control. Some of the world’s biggest corporations mentioned during the trial were Goldman Sachs to McKinsey, Moody’s, and IBM.

J. Robert Brown Jr, a securities law professor at the University of Denver Sturm College of Law, commented to the Financial Times after the verdict was revealed, “Every reputable company and advisory entity, including investment banks and McKinsey, has got to be horrified by this.”
- Komfie Manalo

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Opalesque Exclusive: New systematic strategy embraces machine learning[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The founder of a New York-based systematic trading firm, which offers a hybrid between alpha strategies and alternative feta at lower fees, describes his approa

  3. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  4. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  5. Hedge funds decline in June as stocks tumble on Greek woes[more]

    From Bloomberg.com: Hedge funds posted losses across strategies last month as uncertainty over whether Greece will remain in the euro sent global stock markets tumbling. Winton Capital Management declined about 3.1 percent in June in its $12.1 billion Winton Futures Fund, leaving it down 1.9 percent

 

banner