Wed, Mar 21, 2018
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

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. John Paulson, once the industry's largest hedge fund, to return some investors' money[more]

    Komfie Manalo, Opalesque Asia: John Paulson is reported to be retuning some of his investors' money as a number of his hedge funds continue to suffer setbacks, reports

  2. DoubleLine's Gundlach sees U.S. 10-year Treasury yield rising, weighing on stocks[more]

    From Reuters/ Jeffrey Gundlach, the chief executive of DoubleLine Capital and known on Wall Street as the "Bond King," said on Tuesday the yield on the U.S. 10-year Treasury note will likely move higher and pressure riskier assets including equities and junk bonds. Gundlach, on an

  3. SEC charges Theranos CEO Holmes with fraud[more]

    Bailey McCann, Opalesque New York: The SEC has charged Elizabeth Holmes, founder and CEO of Theranos and its former President Ramesh "Sunny" Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about t

  4. Institutional Investors - Overdrawn pension fund scores gains[more]

    From Investments in big banks, pawn shops and rolling papers helped boost public safety workers' underfunded pensions this past calendar years, according to newly released figures. After recording middling returns in recent years, the Police & Fire Pension Fund (P&F) notched

  5. Hot hedge fund loses 21% after bet on volatility goes wrong[more]

    From In December, Shahraab Ahmad shared with his hedge fund clients the principle that helped him trounce peers for two turbulent decades: steer clear of the crowd. He'd turned $50 million into an operation with more than $700 million over three years and delivered market-beating retu