Galleon hedge fund billionaire Raj Rajaratnam found guilty in insider trading case
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A jury found former hedge fund magnate Raj Rajaratnam guilty on all 14 counts of conspiracy and securities fraud after a high-profile trial at the heart of a federal crackdown on insider trading.
The verdict in U.S. District Court in Manhattan came after 12 days of deliberation, and more than two months after the trial began.
It marks a major victory for prosecutors who laid out evidence indicating that privileged information and stock tips were traded at the highest levels of the financial world.
The government accused Rajaratnam of making more than $50 million in illicit profits by trading on inside information given to him by associates at some of America’s corporate standard bearers, including Google, Hilton and Goldman Sachs.
Lawyers for Rajaratnam, whose tenure at the helm of hedge fund operator Galleon Group made him a billionaire, argued that he traded stocks based on legitimate research employing information that was already public.
During the nearly seven-week trial prosecutors presented extensive evidence, including text messages, trading records and wiretapped phone calls.
The jurors had to start their deliberations over last week after a member of the jury had to drop off due to illness.
Rajaratnam is set to be sentenced on July 29. Each of the nine securities fraud counts carries a maximum prison term of 20 years. Rajaratnam is free until sentencing on a $100 million bail.
The U.S. Attorney who brought the case, Preet Bharara, said in a statement: “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.”
-- Nathaniel Popper