Scorecard of ups and downs for May 24 - June 13, 2011.
Winners & Losers (May 24 - June 13, 2011)
A New York jury unanimously convicted the founder of Galleon Group, a large hedge fund, on 14 securities fraud and conspiracy counts stemming from one of the largest insider trading scandals in memory. Rajaratnam’s lawyers attempted to portray their client as a diligent researcher who based his fortuitous trades on a “mosaic” of publicly available information. But their case was crushed by extensive wiretap evidence. Prosecutors also previously secured guilty pleas from dozens of others associated with the scheme, several of whom provided damning testimony at trial. Rajaratnam was found to have raked in tens of millions of dollars trading on secrets illegally acquired from a network of contacts inside firms like IBM, investment bank Goldman Sachs and management consultancy McKinsey & Co., whom he richly compensated for the leaks. This does great violence to his carefully cultivated image; Galleon managed US$7 billion at its peak, and the Sri Lankan–born businessman and philanthropist at one time possessed heroic status among some South Asian immigrants. Rajaratnam, who faces potentially two decades or more in prison, is to be sentenced in July. He has indicated he will appeal.