Thursday, May 12, 2011
Preet Bharara, the U.S. attorney for Manhattan, is fighting systemic corruption.
The New York Times reports hedge fund manager Raj Rajaratnam, who's Galleon Group hedge fund managed more than $7 billion in assets, was found guilty on yesterday of fourteen counts of fraud and conspiracy by a federal jury in Manhattan. Evidence showed that Mr. Rajaratnam allegedly used a corrupt network of tipsters to personally make over $63 million from insider trading trading in stocks. Apparently, that was merely the tip of the iceberg.
Rajaratnam and his firm paid out roughly $300 million in trading commissions annually to brokerage firms. As one of the prosecutors noted, "Cheating became part of his business model." Rajaratnam was taped saying, among many other incriminating statements, "I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share," in advance of the bank’s earnings announcement.
Unfortunately, the uber-wealthy Rajaratnam's lawyers will appeal the verdict and will likely keep him out of jail long enough to flee the country. He will probably be sipping cocktails and proffering advice at Davos next year.