Wow, one fell through the cracks.
Galleon billionaire convicted of fraud, conspiracy
By David S. Hilzenrath, Updated: Wednesday, May 11, 10:14 AM
Hedge fund billionaire Raj Rajaratnam was convicted on all 14 counts of fraud and conspiracy Wednesday in the biggest insider trading case in a generation.
The verdict was an historic victory for the Justice Department, which used tactics once reserved for investigations of mobsters, drug dealers and the like to expose financial professionals and corporate insiders trafficking in such business confidences as details about pending mergers.
The prosecution secretly made recordings of Rajaratnam talking to his alleged tipsters, taking the jury to a dark side of Wall Street that was long the realm of suspicion rather than proof. The government also drew upon testimony of co-conspirators whom the government had turned against Rajaratnam.
Rajaratnam, 53, head of Galleon Management, was accused of using fraud to reap profits or avoid losses of more than $60 million.
The case ushered in a new era in white collar criminal prosecutions, said Anthony Michael Sabino, a professor at St. John’s University.
“For more than 30 years, the government has had a spotty history in insider trading cases, reflecting the difficulty of gathering evidence, explaining the machinations of high finance to a jury, and reconciling sometimes conflicting legal theories,” Sabino said in a statement.
“Not so here, because Raj hung himself with his own words, as caught on tape,” he said.
One of Rajaratnam’s alleged tipsters had been a member of the board of Wall Street powerhouse Goldman Sachs and a former head of the international management consulting giant McKinsey & Co. He allegedly tipped Rajaratnam to the fact that Berkshire Hathaway chairman Warren Buffet was going to make a crucial investment in Goldman Sachs at the height of the financial crisis.
The parade of witnesses at the trial in federal court in Manhattan included the chairman of Goldman Sachs, Lloyd Blankfein.
Rajaratnam did not testify in his own defense, but his lawyer argued that he traded on legitimate investment analysis and information in the public domain.
“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,” Manhattan U.S. Attorney Preet Bharara said in a statement.
Insider trading should be offensive to everyone who relies on the stock market because it “ cheats the ordinary investor, victimizes the companies whose information is stolen, and is an affront not only to the fairness of the market, but the rule of law,” he said.
Amid a broader crackdown on such crimes, Rajaratnam was the 35th person-- and the most prominent -- convicted of insider trading in the Southern District of New York in the past year and a half.
The stakes were high for both sides.
Given the extraordinary evidence the government had amassed against Rajaratnam, had the verdict gone the other way, “it would have made insider trading cases against Wall Street traders almost impossible,” said J. Robert Brown, professor of law at the University of Denver’s Sturm College of Law.
Brown predicted the verdict will force insider traders to exchange information “in a more devious manner,” but he doubted it would hamper insider trading.
“The money in this area is too big,” he said.
Wow, one fell through the cracks.
He's the token jailbird. Probably going to spend the rest of his life playing tennis in minimum security.
Hopefully this POS below will be next...
Goldman Sachs Chief Blankfein Could Face Criminal Prosecution For Role In Financial Crisis
William F. Buckley describes a conservative as, "someone who stands athwart history, yelling Stop." - and then proceeds to drag civilization back to times best left in history's dungheap.