In what has been a heavily-watched insider trading case, Galleon Group hedge fund manager Raj Rajaratnam has been found guilty on all 14 counts of securities fraud and conspiracy, according to multiple reports. The announcement was made in a lower Manhattan federal court. For now, Rajaratnam, who ran one of the world’s largest hedge funds, will be free on bail, but will be fitted with an electronic monitoring device. Reuters has more on the Rajaratnam verdict: Rajaratnam, a one-time billionaire, will remain free on bail until sentencing on July 29, U.S. District Judge Richard Holwell ruled after the jury delivered its verdict. Rajaratnam was expressionless during the verdict reading by a courtroom deputy. He could face 15-1/2 to 19-1/2 years in a federal prison under sentencing guidelines, prosecutors said. The Manhattan federal jury announced its unanimous verdict on the 12th day of deliberations in what many legal experts said was a strong prosecution case using FBI phone taps and testimony of three former friends and associates of Rajaratnam. The jury convicted Rajaratnam of nine counts of securities fraud and five counts of conspiracy for what prosecutors describe as the money manager’s central role in the most sweeping probe of insider trading at hedge funds on record. During the two-month trial, prosecutors hammered at their argument that Rajaratnam cheated to gain an unfair advantage in the stock market from 2003 to March 2009, reaping an illicit $63.8 million. Defense lawyers had stuck consistently to their main theme that Rajaratnam’s trades were guided by a trove of research and public information, not secrets leaked by highly-placed corporate insiders. Sri Lankan-born Rajaratnam, 53, was ordered to be fitted with an electronic monitoring device while out on bail. Prosecutors had asked the judge to jail Rajaratnam pending sentencing, but the judge rejected that request. The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184. The Wall Street Jorunal has a nice round-up of some of the key moments that may have swayed the jury. For example, Rajaratnam apparently told a colleague: “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share. The Street has them making $2.50.” Because this information came from a key bank employee and was sufficiently outside of the consensus view, the WSJ reports, prosecutors deemed it “material” information. In 2009, Forbes estimated Rajaratnam’s net worth at $1.3 billion, ranking him 559 on the magazine’s list of the world’s richest people. Below read the release from the United States Attorney’s office (via Business Insider): Rajaratnam Raj Verdict
Posted by
on May 11, 2011. Filed under News.
You can follow any responses to this entry through the RSS 2.0.
You can skip to the end and leave a response. Pinging is currently not allowed.
Posted by
on May 11, 2011. Filed under