Tags : insider trading, Raj Rajaratnam
Billionaire Hedge Fund Founder Arrested For Insider Trading
New York, NY (AHN) – The founder of one of the largest hedge funds in the United States and five other persons have been arrested and charged with insider trading by federal prosecutors.
Arrested were Raj Rajaratnam, the founder of Galleon Group; Rajiv Goel, a director in strategic investments at Intel Corp., Anil Kumar, a director at consulting firm McKinsey & Co.; Robert Moffat, an IBM Corp. executive; and Danielle Chiesi and Mark Kurland, former officials at Bear Stearns Asset Management.
Galleon, a technology-focused hedge fund firm, manages more than $4 billion in assets.
Prosecutors charge that between January 2006 and October 2008, Rajaratnam and others traded shares of several companies, including Google and Advanced Micro Devices, based on insider information. Galleon allegedly made almost $17 million on the trades.
Wiretaps on Rajaratnam’s phone intercepted calls between him and Chiesi in which she passed along confidential company information from Moffat and an unidentified person at Akamai Technologies, according to complaints filed in Manhattan federal court.
Prosecutors said they began their investigation in November 2007 after an unnamed person began talking to agents of the Federal Bureau of Investigation. That person had traded on insider information and given tips to Rajaratnam in 2006, they said. The informant, who has agreed to plead guilty, cooperated with investigators.
Rajaratnam, 51, is listed as the 559th richest person in the world by Forbes. His net worth is estimated at $1.3 billion.
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