Raj Rajaratnam, Billionaire Hedge Fund Founder of the Galleon Group, Ex-Bear Stearns Directors, Others Charged with Inside Trading

It looks like Bernie Madoff is about to get some company in the scumbag world. Raj Rajaratnam, the billionaire founder of the hedge fund firm Galleon Group, and ex-directors at a Bear Stearns Cos. hedge fund are among six people charged in a $20 million insider trading scheme by federal prosecutors. Incidentally, Rajaratnam is a big Democratic Party donor. He made big donations to Hillary Clinton. I am sure she has to be saying to herself, "oh no, not again."

Among the accused are Rajiv Goel, who worked at Intel Capital as a director in strategic investments, Anil Kumar, who worked as a director at McKinsey & Co., and IBM Corp. executive Robert Moffat. The former officials at Bear Stearns Asset Management are Danielle Chiesi and Mark Kurland, who were affiliated with the firm’s New Castle Partners, which managed about $1 billion.

Rajaratnam used “devices, schemes and artifices to defraud,” one of two complaints in Manhattan federal court says. Prosecutors said they used wiretaps on the billionaire’s phone. “A number of the calls intercepted over the wiretap consist of Rajaratnam either providing, receiving, or seeking material nonpublic information about various publicly traded companies,” a complaint says.

According to U.S. Attorney Preet Bharara, this is the first first time wiretaps were used to target insider trading. Baharara further stated that tips came from insiders and others at hedge funds, investor relations firms, and companies including Intel, IBM, McKinsey, and companies whose shares were traded in the scheme.

The feds bagged a big one. Rajaratnam, 52, a graduate of the University of Pennsylvania’s Wharton School and was identified this year by Forbes as the 559th richest person in the world, with a net worth of $1.3 billion. Galleon Partners, which is based in Manhattan, has offices in London, Singapore, Mumbai, and Menlo Park, California. He faces 13 fraud and conspiracy counts, most of which carry 20-year maximum sentences.

The six are charged with using insider information in two schemes to trade in shares of companies including Google Inc., Polycom Inc., Hilton Hotels Corp. and Advanced Micro Devices Inc., according the complaints filed in Manhattan federal court today. Source: NY Daily News

Five of the defendants have been arrested in the New York City area and will appear in the Manhattan court today. Goel was arrested in California. Once a dirtbag always a dirtbag. Another bunch of hustlers have been taken off the streets.