Opening Arguments Begin For Galleon Group founder Raj Rajaratnam

By Jeralyn, Section Crime in the News
Posted on Wed Mar 09, 2011 at 09:10:00 AM EST
Tags: Raj Rajaratnam (all tags)

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In what is being called the largest insider trading trial in a generation, opening arguments in the trial of Galleon Group's Raj Rajartnam begin today.

Since arresting 53-year-old U.S. citizen Rajaratnam in October 2009 and announcing criminal charges against 26 former traders, executives and lawyers, the U.S. government has pressed ahead with what it calls the biggest probe of insider trading in the $1.9 trillion hedge fund industry. Nineteen people have pleaded guilty in the Galleon case.

There are wiretaps and cooperators galore. There will be a feast of corporate-leaked secrets. It will expose the hedge-fund industry.

Former Goldman Sachs Group director Rajat Gupta, who has not been criminally charged but had civil SEC charges brought against him last week, may play a prominent role. The feds have phone calls in which he allegedly provided Rajaratnam with confidential information from Goldman Sachs. [More...]

Chief defense lawyer John Dowd has argued in court papers that prosecutors have broadened the definition of insider trading. He said a money manager's liberty should not be at risk because he trades on a stock while knowing something about the company.

The Government must prove that Rajaratnam received information from a fiduciary who was not allowed to disclose it, and then traded based on the information.

A primer is here.

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Opening Arguments Begin For Galleon Group founder Raj Rajaratnam | 10 comments (10 topical)

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Poor Raj... (none / 0) (#1)
by kdog on Wed Mar 09, 2011 at 12:54:58 PM EST

but occasionally a sacrifical lamb is required...ya know, to keep up appearances and keep the rubes losing at the tables, so the insider traders can keep on winning.

Whoever doesn't think insider trading is the norm at the Wall St. casino is very naive.

My mom never bought that argument (none / 0) (#2)
by jbindc on Wed Mar 09, 2011 at 12:56:54 PM EST

"But everyone else is doing it!"

Why should we?

Isn't it odd... (5.00 / 1) (#3)
by kdog on Wed Mar 09, 2011 at 01:35:56 PM EST

that the last two "high profiles" are a woman and a brown dude though?

Where are the old crackers rockin' a Y chromosome? Ya know, the demographic the vast majority of insider traders occupy?

I smell the familar stench of different rules, different fools...


Well (none / 0) (#4)
by jbindc on Wed Mar 09, 2011 at 01:42:23 PM EST

Since, in this case, this is the largest insider trading case in US history, I don't see how you'd get a white guy in there.

I don't know who the woman you refer to is - maybe Martha Stewart? But that was in 2004. You are also forgetting Jeffrey Skilling of Enron (a white dude) who was convicted in 2006.

Here are some of the most famous insider trading cases.


It's only the largest case... (5.00 / 1) (#6)
by kdog on Wed Mar 09, 2011 at 02:08:11 PM EST

because they ain't looking for a larger one, imo.

Point taken though...forgot about the Enron gangsters, thought of that as more of a straight-up fraud case, but there were insider trading charges as well. And I was referring to fall-gal Martha...correct.

The NYSE is to insider trading like a Phish concert is to marijuana possession...pick a collar, any collar. I guess when a certain crime, like insider trading or drug possession, is so rampant, every collar looks like selective prosecution/enforcement.


They ARE looking (none / 0) (#7)
by jbindc on Wed Mar 09, 2011 at 02:20:51 PM EST

What I do for a living - document review, says the government is looking. Not as much as I'd like, of course (for my political reasons and because my livelihood depends on it).

But all I do all day is review documents for reponsiveness to subpoenas - usually from the DoJ or SEC - against companies. In the last 4 years, I've reviewed documents in antitrust investigations, mortgage fraud investigations, violations of the Foreign Corrupt Practices Act and Export Controls Act, and white collar crime. I'm currently working on a securities fraud project.

Of course, maybe if the DoJ hired more investigators..... :)


What???!!! (5.00 / 1) (#8)
by Zorba on Wed Mar 09, 2011 at 02:29:59 PM EST

Don't you know we're supposed to be down-sizing the government, jb? "More investigators," indeed. Not when there are more tax cuts for the wealthy and corporations to be had.


: I need to keep working (none / 0) (#9)
by jbindc on Wed Mar 09, 2011 at 02:35:00 PM EST

More investigations!

Looking for small fish... (none / 0) (#10)
by kdog on Wed Mar 09, 2011 at 02:43:13 PM EST

you know what I'm on about...a serious investigation into Lloyd Blankfein's dealings would lead to a cease and desist order to the investigator direct from Timmy G.

Raj here probably thought he was in the club, but he was only on a day pass.


also (none / 0) (#5)
by CST on Wed Mar 09, 2011 at 01:54:57 PM EST

"announcing criminal charges against 26 former traders, executives and lawyers"

I'd be willing to bet some of them are white guys.
