Rajaratnam's 'greed' led to his downfall

Rajaratnam's 'greed' led to his downfall

Rajaratnam's 'greed' led to his downfall

Sri Lanka-born Rajaratnam, 54, was found guilty on all the 14 counts of securities fraud and conspiracy, and now face jail for up to 20 years.

"Rajaratnam was among the best and the brightest – one of the most educated, successful and privileged professionals in the country," Bharara said after the 12 member jury's decision.

"Yet, like so many others recently, he let greed and corruption cause his undoing," he said.

"The message today is clear -- there are rules and there are laws, and they apply to everyone."

The case had been dubbed as the largest insider trading case in US history.The jury had seven weeks of evidence and closing arguments in the trial, which began in March. The prosecution had accused Rajaratnam of making USD 63 million from insider tips.

Rajaratnam, who posted a USD 100 million bail, is out on bail until he is sentenced on July 29. He will be fitted with an electronic monitoring device.

"The defendant knew tomorrow's news today, and that meant big money," US Assistant Attorney Reed Brodsky told the jury during closing arguments in April.

But the defence had argued that Rajaratnam traded on a "mosaic" of public information.
Twenty-people have pleaded guilty in the huge insider trading case. Rajaratnam was arrested in 2009.

John Dowd, the defence lawyer, said his client will appeal the decision.Many observers, however, said the defence could not beat that government case, which relied on wiretapped phone conversations and witnesses, who had pleaded guilty.

In a July 25, 2008, phone call, Rajat Gupta, a former board member of Goldman Sachs, told Rajaratnam about his firm's deliberations on buying a commercial bank.

"And there’s a rumor, that Goldman might look to buy a commercial bank," Rajaratnam said in the conversation.

"This was a big discussion at a board meeting," Gupta said. "It was a divided discussion in that board."

Gupta has not been criminally indicted but he is fighting civil charges slapped by the Securities and Exchange Commission. Llyod Blankfein, the CEO of Goldman Sachs, was called as a government witness, said that Gupta had broken the firm's confidentiality policy in his conversation with Rajaratnam.

"You trade based upon the real fly on the wall, Mr Gupta, the person who is in the Goldman boardroom, who knows what Goldman is really going to do," Brodsky said.
The government presented several witnesses including two Indian-Americans – Anil Kumar, a former director McKinsey & Co and Rajiv Goel, a former executive at Intel Inc.
They had pleaded guilty to accepting large sums of money in exchange for providing information Rajaratnam.

Kumar told a jury on Monday that he provided confidential information to Rajaratnam on a "super-confidential" deal involving the acquisition of ATI Technologies Inc, a chip making company, by its Advanced Micro Devices Inc (AMD)."I told him that this was red hot," Kumar said.

"Please do keep this to yourself... Don't let anyone know."Kumar, 52, said he received a USD 1 million "bonus" for the information he gave on the AMD-ATI deal.
"I almost fell off my chair," he said, recalling the call he got from Rajaratnam offering him the money.

Kumar, Goel and Rajaratnam were classmates at Wharton School of University of Pennsylvania, some 30 year ago.

Goell, confessed to telling Rajaratnam that Intel was planning to make a USD1 billion investment in a new joint venture with Clearwire and Sprint to develop an ultra-fast wireless Internet service.

"Raj and I were very good friends," Goel told the jury in March. "He was a good man to me. I was a good pal, a good person to him, so I gave him the information."

Rajaratnam's conviction is a significant win for the prosecution, which poured a great deal of time and resources into nabbing him—especially through expensive wiretaps.

Judge Richard Holwell allowed Rajaratnam to stay out of jail on a USD100 million bail until he is sentenced on July 29.

He will be fitted with an electronic monitoring device and is expected to stay at his home