Billionaire Raj Rajaratnam Charged With Insider Trading

According to the sources, the federal officials reportedly arrested the hedge fund honcho Raj Rajaratnam along with five other executives of several other prestigious US companies on charges of “insider-trading”, an illicit scheme that netted about $20 million of illegal profits. The arrest shook the world of hedge fund with the arrest of Raj Rajaratnam, of what seems to be the largest insider-trading scam ever.

According to the investigators, the investigating officials used telephone wire-taps to net the founder of the $7 billion hedge fund Galleon Group and four others with charges of conspiracy and fraud. Inside sources revealed that this is the first time that the officials used a telephone wire tap in the Wall Street insider trading case. Among the arrested were Raj Rajaratnam, two executives from hedge fund New Castle and three executives from prestigious US companies such as IBM, McKinsey & Co. and the chip honcho Intel Corp. According to Preet Bharara, the US attorney for Manhattan, the hedge fund scam is probably the biggest criminal case involving the hedge fund insider-trading. The case is also the first of its kind where the investigating officials used court-approved telephone wire-taps in order to net the aforementioned accused who were involved in inside-trading in order to gain illicit profits.

According to the sources, Mr.Rajaratnam, the prime accused in the inside-trading case was charged for reportedly conspiring with the Intel Capital Treasury department manager Rajiv Goel and McKinsey & Co. director Anil Kumar. The reported offense took place in 2006. Sources revealed that Rajaratnam, who is hailed as the richest Sri Lankan in the world had to surrender his traveling documents to the court. The case has been billed as the biggest insider-trading scam in recent times.