According to the following article this is the biggest case against a hedge fund ever - and it's getting even bigger as we speak as a result of the
ongoing investigations:
A further 14 individuals have been charged in connection with the alleged $20bn (£12m) insider trading scheme at US hedge fund Galleon Group.
The development comes three weeks after Galleon founder Raj Rajaratnam and five others were arrested.
Mr Rajaratnam and his co-defendants are alleged to have gained $20m in illegal profits thanks to inside information on firms including Google and AMD.
...The Sri Lankan-born hedge fund boss is estimated to be worth $1.3bn.
Galleon Group, which has up to $7bn in assets under its management, said last month that it intends to "cooperate fully with relevant authorities".
Please visit the link provided for the complete story.
This is definitely one to watch.
Prosecutors claimed the insider trading also took place at the New Castle hedge fund and Intel Capital, the investment arm of microchip giant
Intel. The others charged in the case include Rajiv Goel, a director of strategic investments at Intel Capital; and Robert Moffat, senior vice
president in the systems and technology division of computer group IBM. They are joined by Anil Kumar, a director at global management-consulting firm
McKinsey & Co; and Danielle Chiesi and Mark Kurland of New Castle Partners.
The insider trading is said to have taken place between January and July 2007.
US attorney Preet Bharara told a press conference that... it also marked the first use of court-authorised wiretaps to capture conversations
between suspects.
"Greed is not good," said Mr Bharara. "This case should be a wake-up call for Wall Street." He added that anyone on Wall Street thinking of
breaking the law should now be asking themselves "is law enforcement listening?".
Source
The following also forms an intersting background to the case:
The reputation of hedge funds took a beating earlier this year when Bernard Madoff was jailed for 150 years for running a $65bn Ponzi scheme.
Soon afterwards, Mr Khuzami told the US Congress that the SEC had failed in its mission to protect investors. "It is a sobering and humbling
experience," he said. "We deeply regret our failure to detect the Madoff fraud and pledge to continue to fix the problems that contributed to this
failure," he and acting director of exams and compliance John Walsh added.
Mr Rajaratnam's arrest is probably the first step as the SEC attempts to restore investor confidence.
Source
One can only wonder how high up the tree the investigations will be allowed to go...
[edit to fix link]
[edit on 5/11/09 by pause4thought]
