Billionaire investor Raj Rajaratnam was convicted this morning in NY on 14 counts related to fraud and conspiracy - and faces almost 20 years in prison, though he's certain to appeal. Receiving huge coverage in NY, the government's case centered on the wiretaps of Rajaratnam's phone conversations in which he brazenly swapped stock tips with corporate insiders and fellow traders. From DealBook:
For years, Mr. Rajaratnam was lionized as one of Wall Street's savviest investors. At its peak, his Galleon Group hedge fund managed more than $7 billion in assets. Investment banks including Goldman Sachs and Morgan Stanley counted Galleon, which paid out roughly $300 million in trading commissions annually to brokerage firms, as one of their largest trading clients. In the early morning hours of Oct. 16, 2009, federal agents arrested Mr. Rajaratnam at his Sutton Place apartment on Manhattan's East Side. The government placed him at the center of a vast insider trading conspiracy, accusing him of using a corrupt network of tipsters to earn tens of millions of dollars in illegal trading profits in stocks including Google and Hilton Worldwide.
The case has led to insider trading charges against 25 defendants, including former executives at I.B.M., Intel and Bear Stearns. So now we know that a bunch of rich guys have been gaming the system - what a surprise!