Rajaratnam found guilty
Billionaire Galleon Group hedge fund co-founder Raj Rajaratnam enters a Manhattan Federal Court on the second day of the defense phase of his trial for insider trading on April 12, 2011 in New York City.
STEVE CHIOTAKIS: Galleon hedge fund founder Raj Rajaratnam was convicted this morning on all counts of conspiracy and securities fraud in his New York City trial -- 14 counts in all. Rajaratnam faces up to 20 years in prison but was released on bond until his sentencing in late July.
Marketplace New York Bureau chief Heidi Moore has been following the trial and is with us live to talk about this morning's verdict. Hi Heidi.
HEIDI MOORE: Hi Steve. How are you?
CHIOTAKIS: I'm doing well. Remind us of the charges Rajaratnam was accused of. He was convicted of all the charges, right?
MOORE: Right. Exactly. So most of the charges were securities fraud which in this case means insider trading. He wanted to get information about companies that were about to announce big news like, you know, new earnings or mergers. And then he arranged to trade on that information -- making a very tidy bundle of $60 million. The other chargers were related to conspiracy. So he had about 26 people who were also accused of the same things he was. And 21 of them have already plead guilty. Which of course, I guess, made it a foregone conclusion that he would too. But it's still a stunning verdict.
CHIOTAKIS: Put this into context for us, Heidi. How big a deal is this conviction?
MOORE: Right. Well that's why this is a stunning verdict. It is incredibly hard to get an insider trading conviction because it can be so shadowy. How do you know when somebody got the information and when they traded on it? Maybe it was just a casual conversation -- maybe it wasn't with bad intent. So for prosecutors to be able to get a huge fish like Raj Rajaratnam, one of the most successful hedge fund managers on Wall Street, is really the victory of what is a very young century right now.
CHIOTAKIS: Will this have broader implications for Wall Street?
MOORE: Sadly, probably not. One thing that we have to keep in mind is that all of the things that Raj Rajaratnam was accused of happened over the course of the past 10 years. So, this is really a clean up case, and there's a lot of insider trading that goes on and will go on because people wan to test their limits. So maybe people will be a little bit more careful for a while. But as we've seen, insider trading is an evergreen problem on Wall Street. It keeps happening again and again. So it probably will in the future.
CHIOTAKIS: And the sentencing is in late July right?
MOORE: Right, exactly. And he faces about 15 to 20 years in jail but he'll probably appeal before that.
CHIOTAKIS: New York Bureau chief Heidi Moore, reporting live for us. Heidi, thank you.
MOORE: Thank you Steve.