|[Photo from The Hindu]|
New York federal prosecutors are no doubt still running their victory laps this evening after a United States district court jury reportedly returned guilty verdicts today on 14 counts involving insider trading against Raj Rajaratnam, a multi-millionaire hedge fund manager. According to various news reports, the government relied heavily on wiretap evidence, including conversations in which Rajaratnam allegedly bragged to others about insider trading, in order to obtain the convictions on security fraud and conspiracy charges.
Insider trading generally involves buying or selling stock in publicly held companies while benefitting from "inside" tips or information about the stock's value which is unavailable to the public. You might recall that the Martha Stewart investigation began based upon allegations of insider trading. According to the U. S. Department of Justice, this is supposedly the largest insider trading case involving a hedge fund in U.S. history.
As a former federal prosecutor, I can tell you that these government prosecutors were lucky to have wiretap evidence in this case. This evidence undoubtedly turned a complex white collar crime case into something more easily digested by a jury. No doubt Rajaratnam's criminal defense attorneys will appeal his convictions. Also, sentencing will reportedly be held at a later date.