It was the biggest insider trading trial in a generation.
It ended today in New York with a slam dunk for U.S. prosecutors and the Justice Department.
Raj Rajaratnam, the billionaire investor who once ran Galleon — one of the world’s largest hedge funds — was found guilty of 14 fraud and conspiracy charges by a federal jury in Manhattan.
Rajaratnam is the most prominent person convicted in the U.S. government’s ongoing crackdown on insider trading on Wall Street.
The hedge fund founder and former "legend" of the industry is here described by the New York Times' DealBook blog:
For years, Mr. Rajaratnam was lionized as one of Wall Street’s savviest investors. At its peak, his Galleon Group hedge fund managed more than $7 billion in assets. Investment banks including Goldman Sachs and Morgan Stanley counted Galleon, which paid out roughly $300 million in trading commissions annually to brokerage firms, as one of their largest trading clients.
But there was one tiny problem with that stellar image: the legend was a crook, whose net worth of $1.3 billion made him the 559th richest person in the world, according to Forbes.
“Rajaratnam, once a high-flying billionaire and hedge fund manager, is now a convicted felon, 14 times over,” Manhattan U.S. Attorney Preet Bharara said in a statement after the verdict.
“Rajaratnam was among the best and the brightest — one of the most educated, successful and privileged professionals in the country," Bharara added. "Yet, like so many others recently, he let greed and corruption cause his undoing.”
What did he do?
Prosecutors said Rajaratnam traded on inside information related to more than a dozen companies including Intel, Google, Hilton Hotels, Goldman Sachs and others.
He denied the charges. The jury thought otherwise.
Today's conviction is a big win for the U.S. government's attempts to clean up Wall Street over the past year and a half.
Manhattan U.S. Attorney Bharara said his office has charged 47 people with insider-trading crimes. Rajaratnam is the 35th person to be convicted.
“We will continue to pursue and prosecute those who believe they are both above the law and too smart to get caught,” Bharara said in the statement, published on Bloomberg.