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http://www.reuters.com/article/topNews/idUSTRE59F35L20091016
NEW YORK (Reuters) - Galleon Group founder Raj Rajaratnam and
five others were charged with engaging in the largest ever hedge
fund insider-trading scheme, generating profits of more than $20
million over several years, U.S. prosecutors, the FBI and the
SEC said Friday.
Insider trading by hedge funds Galleon and New Castle and
Intel's Intel Capital unit took place in shares of Hilton Hotels
Corp, Google Inc, IBM, Advanced Micro Devices Inc and other
stocks, according to two complaints filed in U.S. District Court
in New York.
All six accused have been arrested, a spokeswoman for the
federal prosecutor's office in Manhattan said. The case could
represent an important development in the government's
enforcement of securities laws, she said.
"This is not a garden-variety insider trading case," U.S.
Attorney Preet Bharara told a news conference. Beyond the scale
of the scheme, "It shows that we are targeting white-collar
insider trading rings with the same powerful investigative
techniques that have worked so successfully against the mob and
drug cartels."
He also fired a warning shot for the rest of Wall Street.
"Today, tomorrow, next week, the week after, privileged Wall
Street insiders who are considering breaking the law will have
to ask themselves one important question: Is law enforcement
listening?" he said.
Securities fraud charges carry possible maximum prison sentences
of up to 20 years.
SRI LANKA TITAN
One of the criminal complaints accuses Rajaratnam, considered
the richest Sri Lankan in the world, of conspiring with Intel
employee Rajiv Goel and Anil Kumar, a director of powerful
management consulting firm McKinsey & Co. The alleged offenses
took place for about three years starting in January 2006.
Galleon had as much as $7 billion under management, the
complaint said. Intel Capital is the investment arm of Intel
Corp. Officials from Galleon did not return calls seeking
comment.
Rajaratnam, born into a family of well-to-do Tamils in the Sri
Lankan capital Colombo, is one of the largest investors on the
Colombo Stock Exchange. |
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