On May 11, a jury in Manhattan found Raj Rajaratnam, billionaire founder of the Galleon Group, guilty on 14 counts of securities fraud and conspiracy. Rajaratnam acquired confidential stock tips from insiders at publically traded companies, which allowed him to avoid losses and turn profits totaling $63.8 million. He has vowed to appeal his conviction.
The focus of the largest insider trading case in U.S. history now turns to sentencing. According to some experts, the court is likely to sentence Rajaratnam to 12-15 years in prison, though his sentence could be as high as 20 years if the court finds that his conduct was particularly egregious.
Wiretap Evidence Was Essential
The key to the case against Rajaratnam was a federal wiretap, which allowed prosecutors to present to the jury taped phone conversations between Rajaratnam and Rajat Gupta – former worldwide managing director at McKinsey & Co. and board member at both Goldman Sachs and Proctor and Gamble – in which Gupta provided Rajaratnam with important stock information. One of the main issues on appeal is likely to be whether the wiretap was, in fact, legal. All indications are that Rajaratnam faces a tough battle ahead.
Federal Efforts Just Beginning
By all indications, the federal government is dedicated to financial market reform, particularly given Wall Street’s role in our recent economic collapse. As the Rajaratnam conviction demonstrates, criminal investigations and prosecutions are likely to be a key element to these reform efforts. Unfortunately, increased criminal enquiries may cost innocent professionals their careers and reputations.
An Experienced Attorney Can Help
If you or someone you love is facing federal investigation or prosecution for insider trading or other white collar crimes, contact an experienced criminal defense attorney. A criminal defense lawyer can assess your case and help you protect your rights. For more information, contact an attorney today.