Business

Head of Galleon Found Guilty of Insider Trading

Raj Rajaratnam, hedge fund magnate and head of the Galleon Group, was convicted Wednesday on all counts of fraud and conspiracy in a Wall Street insider trading trial. The New York federal jury found Rajaratnam guilty on all 14 counts. He faces up to 20 years in prison on the most serious charges and as much as 205 years if the judge decides. Raj Rajaratnam was accused of earning $63.8 million on from the use of illegal tips from executives and other company insiders. Judge Richard Holwell let Rajaratnam on bail and set a sentencing date of July 29. His defense attorney said he will file an appeal—that will probably focus on the use of wire taps since they are highly unusual in white collar cases. The prosecutor wasn’t thrilled with the bail decision. “He should be detained. He has a tremendous incentive to flee,” said the prosecutor. He said that Rajaratnam might leave and never come back if he was able to flee to his hometown, Sri Lanka. He noted, “In 22 years of the extradition treaty, not a single Sri Lankan has been extradited.” The defense attorneys said Rajaratnam will not flee because “ninety-five percent of his assets are in this country.”

Others have been caught up in the Galleon probe. The use of wire taps was key. The court also heard wire tapped phone calls where Rajaratnam discussed confidential company information like future earnings announcements and plans for merger. Raj was charged and found guilty of conspiracy to commit securities fraud and of securities fraud. Each of the five conspiracy counts carry a max sentence of five years in prison. Each of the nine securities counts carry a max sentence of 20 years in prison and a fine of $5 million. The judge may run sentences consecutively or decide to make the sentences concurrent and below their possible maximums.

WREPORTER.COM

Angelica Bee

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