New York (HedgeCo.net) – As the Sri Lankan born-American hedge fund manager charged with 14 counts of conspiracy and securities fraud awaits trial, speculation is mounting about who will be testifying against him, close friends and colleagues, among others.
A jury of seven women and five men has been chosen for the trial, which is expected to last more than two months. Rajaratnam could face over 100 years in jail if convicted.
Former Goldman Sachs director Rajat Gupta has already been charged with allegedly tipping Rajaratnam off to a $5 billion investment by Warren Buffett in Goldman Sachs before the information became public.
“The Galleon hedge fund managed to buy nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett’s investment was disclosed.” Bloomberg reports. Rajaratnam is said to have sold the stock for a $900,000 profit.
Two ex-Galleon hedge fund managers also pleaded guilty in January of this year to insider trading. Adam Smith agreed to testify against Rajaratnam in exchange for protection from prosecution for other crimes. Michael Cardillo also pleaded guilty to the same charges. The ex-hedge fund managers agreed to give up any money they made, and Cardillo also agreed to testify against Rajaratnam next month. Smith and Cardillo could face up to 20 years in prison on the securities fraud counts.
Rajaratnam’s co defendant Danielle Chiesi also pleaded guilty in court. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.
Robert Moffat, Jr., in January also pleaded guilty to trading on insider information relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), providing the insider information to to Chiesi. She worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.
Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme.
He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.
Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership in HedgeCo.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
