Billionaire Raj Rajaratnam, who founded hedge fund Galleon Group high-risk, was arrested today along with five other people accused of illegal use of inside information.
Raj Rajaratnam, Galleon Management partner and portfolio manager of the Galleon Group, a high-risk fund with more than 7,000 billion in assets under management, was accused of associating with others of illegally using inside information to several companies procurement, including Google Inc.
Judge Douglas F. Rajaratnam Eaton to set bail at $ 100 million that can be secured with 20 million of collateral, despite the request of prosecutors of being denied the benefit. The judge also ordered the defendant, who has dual U.S. and Sri Lanka, to stay within a radius of 177 kilometers from the city of New York.
Federal prosecutor Preet Bhar said in a press conference unlawful gains added $ 20.6 million and that the case was the largest of which have involved hedge funds.
Also, he said, was the first time they used wiretaps with court authorization to record conversations between suspected of using inside information.
Bhar warned that in future financiers who plan to use information illegally should ask whether the law is listening. “Greed is not good,” said Bhar. “This case should be a warning to Wall Street.
The Securities and Exchange Commission, which filed a separate civil suit against those involved, said that their actions produced more than $ 25 million in unlawful profits. Rajaratnam, 52, appears at position 559 of the list this year compiled by financial magazine Forbes on the world’s richest people, with a net worth of $ 1,300 million.
Rajaratnam was born in Sri Lanka and graduated from the Wharton School of Business at the University of Pennsylvania.
Galleon Group in a statement expressed surprise at the arrest of Rajaratnam. “We had no knowledge of the investigation before they were disclosed publicly, and we intend to cooperate fully with the authorities concerned,” the statement said.
The company also said it continues to operate and maintain conditions of high liquidity.
