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Galleon Founder Convicted on All Counts in Insider-Trading Trial

Published on May 11, 2011
by Michael Rothfeld and Chad Bray

A federal jury convicted Galleon Group founder Raj Rajaratnam on all 14 counts of securities fraud and conspiracy, providing the U.S. with a significant win in a push to prosecute insider trading on Wall Street and in corporate America.

The verdict by the 12-member jury, following 11 days of deliberation, capped a blockbuster trial that started in early March featuring 45 recorded calls showing how the hedge-fund executive trafficked in insider tips provided to him by a web of contacts at the top tier of American business.

The widely watched trial exposed the behind-the-scenes dealings of a once-prestigious hedge fund that gained access to highly sensitive information about, among other things, Goldman Sachs Group Inc. at the height of the financial crisis. The government put at $63.8 million the amount in illegal profits and avoided losses Galleon realized through the scheme.

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