New York (HedgeCo.net) – The Sri Lankan-born American who founded the hedge fund Galleon Group, a New York-based management firm,  was found guilty on all 14 counts of conspiracy and securities fraud yesterday.

Bloomberg – The hedge fund co-founder will appeal yesterday’s verdict to the U.S. Court of Appeals in Manhattan, according to his attorney, John Dowd. Potentially facing almost two decades in prison, will have an “uphill struggle” in seeking to overturn his conviction in the biggest insider-trading trial since the 1980s, a former prosecutor said.

“It’s an uphill struggle, there’s no question about it,” Stephen Miller, a former federal prosecutor, said. “It’s always hard, once you have a judge making credibility findings of any sort for the appellate court to review it, especially in a case of this magnitude.”

Reuters – Some hedge fund managers and investors attending a conference here audibly gasped when the news flashed on TV screens that Raj Rajaratnam had been convicted on all 14 counts of insider trading. (Others) said they had long ago written him off as one of the $2 trillion industry’s “bad apples.”

Boston Globe – Rajaratnam, 53, could be sentenced to as much as 25 years in prison. He could also be forced to disgorge tens of millions of dollars in illegal trading profits.

The verdict is expected to embolden prosecutors in their campaign to ferret out criminal activity on Wall Street trading floors. By using wiretaps — a tactic normally reserved for Mafia and drug trafficking cases — to secretly record the phones of Rajaratnam and others, the government now has a new weapon against white-collar crime.

Rajaratnam remained stoic and stared straight ahead as the courtroom deputy read out the verdict — guilty on all 14 counts.

According to Forbes magazine, Rajaratnam is a Tamil self-made billionaire hedge fund manager. He was the 236th richest American in 2009, with an estimated net worth of $1.8 billion. He was the 262nd richest American in 2008, with an estimated net worth of $1.5 billion. As of 2009 he was the richest Sri Lankan-born individual in the world.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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