Hedge Fund Boss Found Guilty of Insider Trading

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    TK
    AP
    Galleon Group founder Raj Rajaratnam enters Manhattan federal court on the first day of jury selection in March. He was found guilty of all charges on Wednesday.

    Wall Street billionaire Raj Rajaratnam has been found guilty on all counts in an insider trading case that authorities had called the biggest ever involving a hedge fund.

    The verdict was announced Wednesday in Manhattan federal court. The jury had been deliberating since April 25.

    The judge set $100 million bail and a July 29 sentencing date.

    Raj Rajaratnam's Lawyer Flips CNBC Reporter the Bird

    [NY] Raj Rajaratnam's Lawyer Flips CNBC Reporter the Bird
    He was upset after the guilty verdict for his client in what authorities said was the biggest insider trading case involving a hedge fund.

    Prosecutors had alleged the 53-year-old Rajaratnam made profits and avoided losses totaling more than $60 million from illegal tips. His Galleon Group funds, they said, became a multibillion-dollar success at the expense of ordinary stock investors who didn't have advance notice of the earnings of public companies and of mergers and acquisitions.

    On Wednesday, Rajaratnam was motionless as the verdict was read. He will remain free on bail, though now with electronic monitoring until his July 29 sentencing.

    Prosecutors said Rajaratnam faces a maximum term of more than 19 years in prison.

    U.S. Attorney Preet Bharara said the verdict sends a message that white collar laws apply to everyone, "no matter how much money you have."

    The defendant "was among the best and the brightest, one of the most educated, successful and privileged professionals in the country," Bharara said in a statement. "Yet, like so many others, he let greed and corruption cause his undoing."

    Outside court, with Rajaratnam at his side, defense attorney John Dowd said there will be an appeal filed with the 2nd U.S. Circuit Court of Appeals. Of the 37 trades that the government sought to prosecute, he added, only 14 made it to trial.

    "The score is 23-14, in favor of the defense," he said. "We'll see you in the 2nd Circuit."

    The verdict came after seven weeks of testimony showcasing wiretaps of Rajaratnam wheeling and dealing behind the scenes with corrupt executives and consultants. Some of the people on the other end of the line pleaded guilty and agreed to take the witness stand against the Sri Lanka-born defendant.

    Authorities said the 45 tapes used in the case represented the most extensive use to date of wiretaps — common in organized crimes and drug cases — in a white-collar case.

    Lawyers for Rajaratnam, who was once worth more than a billion dollars, had argued that their client only acted on information that was already public.

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