Raj Rajaratnam
American investments manager
- Entries
- 9
- On the record
- 9
- Stories
- 2
- Latest entry
- Jun 24, 2013
The record
Raj Rajaratnam ran the Galleon Group hedge fund until October 16, 2009, when federal prosecutors in Manhattan announced his indictment and the SEC sued him, Galleon Management and six others over trading tips on companies including Google, Hilton, Intel and Akamai. The SEC put the alleged gains above $25 million. U.S. Attorney Preet Bharara called it the largest hedge fund insider trading case ever charged, and ABC News reported it was the first hedge fund case built on court-authorized wiretaps.
A jury convicted him in May 2011 on all 14 counts, five of conspiracy to commit securities fraud and nine of securities fraud, covering conspiracies between 2003 and 2009. Judge Richard J. Holwell entered the judgment on October 25, 2011. In the SEC's civil case, Judge Jed S. Rakoff imposed a $92.8 million penalty that November, which the SEC called the largest against one person in an insider trading case, bringing total sanctions across both cases above $156.6 million.
On appeal he challenged the wiretaps, the first used in a hedge fund insider trading case, and the jury instructions. The Second Circuit, in an opinion by Judges Cabranes, Sack and Carney, affirmed his conviction on June 24, 2013. It held that the misstatements and omissions in the government's wiretap application did not require suppression and that the trial judge's instruction on the use of inside information met the circuit's knowing possession standard.
Roles and honours on the record
Every entry, newest first
- Ruled
Sentenced to 11 years, fined $10 million and ordered to forfeit $53.8 million, per the New York Times. Biggest founder frauds ranked: Madoff tops, $170B forfeiture
- Ruled
Federal jury in Manhattan found Rajaratnam guilty on all 14 counts of securities fraud and conspiracy, the New York Times reported. Galleon insider trading cases ranked: Rajaratnam got 11 years
Stories in this file
Money ยท โ๏ธ Galleon insider trading cases ranked: Rajaratnam got 11 years
Rajaratnam got 11 years, a $10M fine and $53.8M forfeiture; he insisted he had done nothing wrong. Gupta got two years, Smith probation. ๐ฃ๏ธ
Business ยท ๐๏ธ Biggest founder frauds ranked: Madoff tops, $170B forfeiture
Seven names ranked on court and regulator records. Scrushy was acquitted on the HealthSouth fraud counts; the score is an index, not a verdict. ๐
The record, entry by entry
- 2009-10-16 Filed The SEC charged Rajaratnam, Galleon Management and six others, including executives at IBM, Intel and McKinsey, with insider trading that produced more than $25 million in alleged illicit gains. SEC press release 2009-221
- 2009-10-16 Filed Rajaratnam and five others were indicted. U.S. Attorney Preet Bharara called it the largest hedge fund insider trading case ever charged, and ABC News reported it was the first such case to use court-authorized wiretaps. ABC News report
- 2011-05 Ruled A jury convicted him on all 14 counts in the parallel criminal case, the SEC later recorded. SEC press release 2011-233
- 2011-10-25 Ruled Judge Richard J. Holwell of the Southern District of New York entered judgment convicting him of five counts of conspiracy to commit securities fraud and nine counts of securities fraud, for conspiracies running from 2003 to 2009. U.S. Court of Appeals for the Second Circuit, opinion, No. 11-4416-cr
- 2011-10-27 Ruled Galleon Management consented to a judgment making it jointly and severally liable for the monetary relief ordered against Rajaratnam in the SEC case. SEC press release 2011-233
- 2011-11-08 Ruled Judge Jed S. Rakoff imposed a $92,805,705 civil penalty, which the SEC called the largest it had obtained against one person in an insider trading case. Total sanctions across both cases exceeded $156.6 million, and separate SEC charges tied to Rajat Gupta remained pending. SEC press release 2011-233
- 2013-06-24 Ruled The Second Circuit affirmed his conviction, holding that the misstatements and omissions in the wiretap application did not require suppression and that the jury instruction on use of inside information met the knowing possession standard. U.S. Court of Appeals for the Second Circuit, opinion, No. 11-4416-cr
Documents
Sources behind this file
- Fortune report on the end of Gupta's sentence
- PBS Frontline interview with Judge Richard Holwell
- U.S. Attorney's Office (Southern District of New York) press release on the Gupta sentencing
- Forbes report on the Adam Smith sentencing
- New York Times report on the Adam Smith sentencing
- New York Times report on the Rajaratnam sentencing
- New York Times report on the Rajaratnam verdict
- New York Times report on the SEC's case against Rajat Gupta