Dealer guilty of £36m shares fraud
A former Wall Street giant has been convicted in the US of the largest-ever insider trading fraud involving hedge funds.
Sri Lanka-born Raj Rajaratnam used corporate tipsters to give him an illegal edge on massive share deals that made him around 60 million dollars (£36 million).
He was convicted of five conspiracy counts and nine securities fraud charges by a jury in federal court in Manhattan that had been out since April 25.
Prosecutors had alleged 53-year-old Rajaratnam's Galleon Group funds, became a multibillion-dollar success at the expense of ordinary investors who didn't have advance notice of the earnings of public companies and of mergers and acquisitions.
Rajaratnam will remain free on bail, although now with electronic monitoring, at least until his sentencing on July 29.
The verdict came after seven weeks of evidence including wiretaps of Rajaratnam wheeling and dealing behind the scenes with corrupt executives and consultants. Some of the people on the other end of the line pleaded guilty and agreed to give evidence against him.
The 45 tapes used in the case represented the most extensive use to date of wiretaps - common in organised crimes and drug cases - in a white-collar case.
The defence had fought hard in pre-trial hearings to keep the avalanche of audio evidence out of the trial by arguing the FBI obtained it with a faulty warrant. Once a judge allowed them in, prosecutors put the recordings to maximum use by repeatedly playing them for jurors.
"You heard the defendant commit his crimes time and time again in his own words," Assistant US Attorney Reed Brodsky said in closing arguments.
"The tapes show he didn't believe the rules applied to him," the prosecutor added. "Cheating became part of his business model."