Galleon founder Rajaratnam convicted of huge tech stock insider trading

Galleon founder Rajaratnam convicted of huge tech stock insider trading

He faces a 20 year jail sentence

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Galleon hedge fund billionaire Raj Rajaratnam has been convicted on all 14 counts of fraud and conspiracy in relation to the insider trading of shares in a raft of top technology companies and other industries.

US investigators secretly recorded Rajaratnam talking to fellow members of the insider trading operation discussing illegally captured corporate information and trades.

The inside information gleaned is said to have generated $64 million in total profits and avoided losses on trades. Rajaratnam, who is 53, faces a sentence of up to 19 or 20 years.

Companies Rajaratnam and his fellow conspirators focused on included IBM, Intel, AMD and 3Com. Before Rajaratnam was found guilty by a jury, over 20 people involved in the scam had already pleaded guilty to related charges.

As Rajaratnam awaits sentence prosecutors asked for him to be held in prison custody, but this was rejected by the judge and he is now in home custody with electronic monitoring, covered by an existing $100 million bond.

Rajaratnam did not testify in his own defense. He claimed that he traded on legitimate investment analysis and information already in the public domain.
His attorney John Dowd  said he planned to appeal the conviction.

US Attorney Preet Bharara said: “Rajaratnam was among the best and the brightest - one of the most educated, successful and privileged professionals in the country. Yet, like so many others recently, he let greed and corruption cause his undoing.”

The conviction may open the door for prosecutions agains some of Rajaratnam's associates who appeared in court. Others - including former beauty queen Danielle Chiesi, and ex-IBM senior VP Robert Moffat - have already pleaded guilty.

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