comments_image Comments

Major Hedge-Fund "Rockstar" Convicted on Insider Trading Case

 
 
Share
 
 
 

 In a major victory for a wide-sweeping government investigation against hedge-fund and Wall Street impropriety, a guilty verdict has been turned down against Raj Rajnaratam, accused of insider trading According to the Times' Dealbook blog:

Raj Rajaratnam, the billionaire investor who once ran one of the world’s largest hedge funds, was found guilty of fraud and conspiracy on Wednesday by a federal jury in Manhattan. He is the most prominent figure convicted in the government’s crackdown on insider trading on Wall Street.

Mr. Rajaratnam, who was convicted on all 14 counts, could face as much as 19 and a half years in prison under federal sentencing guidelines, prosecutors said on Wednesday.

Mr. Rajaratnam is expected to appeal.

The government built its case against Mr. Rajaratnam with powerful wiretap evidence. Over a nine-month stretch in 2008, federal agents secretly recorded Mr. Rajaratnam’s telephone conversations. They listened in as Mr. Rajaratnam brazenly – and matter-of-factly – swapped inside stock tips with corporate insiders and fellow traders.

The details of the trial and the case are fascinating, both because of Rajaratnam's outsize personality and constant use of sports and military metaphors, and because of what all the wiretaps reveal about the intense competition and gossip and often unethical relationships in the financial world.

Meanwhile, the New York Posttells us about the next big insider trading trial (oddly, in the midst of a story about how the Rajaratnam jury had bonded and was taking group pictures):

Meanwhile, former Galleon trader Michael Kimelman has asked the judge in his upcoming insider-trading trial to let the jury know that he rejected a sweet plea deal "in order to adhere to his position that he his innocent of any criminal conduct."... Kimmelman is set to go on trial on May 16 with brothers and former traders Zvi Goffer and Emanuel Goffer as part of an alleged scheme that involves paying corporate lawyers for information about deals.

 

 

 

AlterNet / By Sarah Seltzer

Posted at May 11, 2011, 5:35am

 
See more stories tagged with: