Wednesday, October 21, 2009
Monday, October 19, 2009
Arrest of Hedge Fund Chief Raj Rajaratnam
The US based Sri Lankan Raj Rajaratnam, the founder of Galleon Group, a New York based hedge fund, was arrested by the FBI for insider trading on October 16, 2009. Rajaratnam, 52, was among six people arrested in what the FBI said is the largest-ever hedge fund insider-trading case. Federal prosecutors charged Rajaratnam with securities fraud and conspiracy to commit securities fraud.
Rajaratnam, a self-made billionaire hedge fund manager, is the 236th richest American according to Forbes Magazine with an estimated net worth of $1.8 billion in 2009. He was ranked 262nd richest American in 2008. As of early 2009, he is the richest Sri Lankan in the world.
He and others arrested along with him are accused by the Justice Department and the Securities and Exchange Commission of using on a huge network of company insiders and consultants to make more than $20 million in profit from 2006 to 2009.
Rajaratnam’s lawyer has said his client is innocent. He is free on $100 million bail and is expected to be in the office on Monday to address Galleon employees. However, his arrest has sent shivers among hedge funds and investors. The case also signals a new zeal by authorities to clamp down on Wall Street crime after failing to detect the $68 billion Ponzi scheme by Bernard L. Madoff. Click here for the Madoff story.
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