Crackdown on Wall Street Insider Trading
Refreshing to see a sign of a serious crackdown on insider trading and other fraud on Wall Street. Yes, the stuff Wall Street big whigs are used to getting away with.
Link from CNBC.
Galleon Group hedge fund founder Raj Rajaratnam was found guilty of 14 securities fraud and conspiracy charges Wednesday, in a vindication for the government's use of aggressive tactics in prosecuting insider trading on Wall Street.
Rajaratnam, a one-time billionaire, will remain free on bail under house arrest with electronic surveillance until his sentencing on July 29, U.S. District Judge Richard Holwell ruled after the jury delivered its verdict.
The Sri Lankan-born Rajaratnam, the central figure in what the government has described as the biggest probe of insider trading at hedge funds on record, sat expressionless between his lawyers while a court official read the verdict.
His chief lawyer, John Dowd, said inside and outside of the courtroom on Wednesday that he would appeal the prosecution's use of secretly-recorded phone calls. After a four-day mini-trial called a Franks hearing last October, the judge denied defense efforts to suppress the phone tap evidence.
"There is a Franks issue that remains a very serious issue that we will take up on appeal,'' Dowd told the judge.
The Manhattan federal jury announced its unanimous verdict on the 12th day of deliberations of a trial that began on March 8. Many legal experts said the prosecution had a strong case using FBI phone taps and testimony of three former friends and associates of Rajaratnam.
"When that many people pleaded guilty in advance, I'm surprised it went to trial," said Michael Koblenz, former federal prosecutor and white-collar defense lawyer at Mound Cotton Wollan & Greengrass.
"I'm surprised they didn't try to work out a deal. But if you've got the money and you want to take a shot, maybe it was worth it to him."
"I'm sure his lawyer said, 'You can spend this much on a defense and see what happens, and if you don't win, then maybe you'll win on appeal.' Maybe they'll get a reversal, but I have no idea," he continued. "Millions of dollars were spent on this case, no question about it. But I guess he took a shot. It will be interesting to see what the sentencing will be."