Biggest Insider Trading Arrest In History

The FBI arrested billionaire, Raj Rajaratnam, in New York, along with some of his key employees, on massive insider trading charges, in a case labeled the biggest ever of its kind.

Rajaratnam bribed employees of various conglomerates for inside company information, enabling him to make substantial sums of money on the stock market.

His name also came up in a terrorism probe, as having contributed to a charity that funneled money to the Liberation Tigers of Tamil Eelam. Yea, so he's pretty much up a creek.

Still humiliated from national and international condemnation for their poor handling of financial regulation in the corporate sector, the SEC and FBI, have been arresting people, left, right and center all over the country.

Over the past few months, there have been several notable arrests made, on ponzi scheme charges, totaling several hundred million dollars in damages, much of which investors will never see again.

Side Bar: among the companies, Raj Rajaratnam, is accused of bribing employees for insider information is McKinsey & Company. The name rang a bell. Upon doing a search of the Judiciary Report's article archives, their name came up as the consultancy firm hired by Hillary Clinton during her failed presidential bid. We all know how much Hillary loves inside information.

Hedge Fund Chief Is Charged With Fraud

Published: October 16, 2009 - By all appearances, Raj Rajaratnam was a self-made billionaire, having built Galleon Group into a giant hedge fund with a specialty in technology companies.

But prosecutors said on Friday that he had profited not from his trading genius but from his Rolodex, and they arrested him on charges of conspiracy and securities fraud in what they called the biggest insider trading scheme ever involving a hedge fund.

In all, six people were arrested, accused by prosecutors and the Securities and Exchange Commission of earning more than $20 million from illegal trading in companies like Google, Akamai and Hilton Hotels over nearly three years...

Mr. Rajaratnam is accused of tapping a vast network of informants across a swath of corporate America: a senior official at I.B.M. considered a contender for the top job at that firm; executives of Intel and the consulting firm McKinsey & Company; two former Bear Stearns employees who had moved to a hedge fund, New Castle Partners; and an analyst at Moody’s Investors Service.

While trading secrets, though, one crucial piece of information was not shared — several of the phones were tapped.

The wiretaps were made with the help of an unnamed cooperating witness, a former Galleon employee who was said to ply Mr. Rajaratnam with information originally to land a job. The witness, who began cooperating in November 2007, has agreed to plead guilty in the hopes of receiving a lesser sentence.

“This case should serve as a wake-up call for Wall Street,” Preet Bharara, the United States attorney for the Southern District of New York, said at a news conference on Friday. He added that the investigation was continuing...

http://www.nytimes.com

Rajaratnam Surfaced in U.S. Terrorism Probe

OCTOBER 18, 2009, 4:37 P.M. ET - WASHINGTON -- The hedge-fund billionaire charged as part of a vast insider-trading case surfaced in an earlier, separate probe into U.S. fundraising by a Sri Lankan terrorist group, people familiar with the probe said.

As part of that investigation, federal agents said they uncovered documents showing that Raj Rajaratnam, founder of the Galleon Group, was among several wealthy Sri Lankans in the U.S. whose donations to a Maryland-based charity made their way to the Liberation Tigers of Tamil Eelam, according to people familiar with the probe.

The LTTE, commonly known as the Tamil Tigers, fought a brutal separatist war carrying out suicide bombings and political assassinations against the government of Sri Lanka from 1976 until it was defeated in May...

http://online.wsj.com