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Rajaratnam convicted of insider trading charges

News18test sharma, |

Updated: May 11, 2011, 8:24 PM IST
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Rajaratnam convicted of insider trading charges
Judge orders Rajaratnam to be fitted with electronic monitoring device while out on bail.

New York: Galleon Group hedge fund founder Raj Rajaratnam was found guilty on all 14 conspiracy and securities fraud charges of insider trading on Wednesday, a verdict that could galvanize the government's aggressive tactics in future prosecutions of Wall Street figures.

The federal jury in New York convicted Rajaratnam of nine counts of securities fraud and five counts of conspiracy for what prosecutors describe as the one-time billionaire's central role in the most sweeping probe of insider trading at hedge funds on record.

The jury announced the unanimous verdict on the 12th day of deliberations in Manhattan federal court in what many legal experts said was a strong prosecution case using FBI phone taps and testimony of three former friends and associates of Rajaratnam.

Prosecutors hammered at their argument that Rajaratnam cheated to gain an unfair advantage in the stock market from 2003 to March 2009, reaping an illicit $63.8 million.

Throughout the two month-long trial, defense lawyers stuck consistently to their main theme that Rajaratnam's trades were guided by a trove of research and public information, not secrets leaked by highly-placed corporate insiders.

Sri Lankan-born Rajaratnam, 53, faces a prison term of up to 25 years when he is sentenced by presiding U.S. District Judge Richard Holwell.

Prosecutors asked the judge to jail Rajaratnam pending sentencing. Soon after the verdict was announced and the jury left the courtroom, prosecutors and lawyers began a hearing on whether or not he should be jailed.

The case is USA v Raj Rajaratnam et al, US District Court for the Southern District of New York, No 09-01184.

First Published: May 11, 2011, 8:24 PM IST
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