Two Indian Americans among 6 held for insider-trading
Two Indian-Americans and a Sri Lankan billionaire are among six people arrested in connection with a USD 20 million hedge fund insider-trading scam, the largest ever such case in the US.
New York: Two Indian-Americans and a Sri
Lankan billionaire are among six people arrested in connection
with a USD 20 million hedge fund insider-trading scam, the
largest ever such case in the US.
Besides Tamil-origin Raj Rajaratnam, the founder of
Galleon Group, the two Indian Americans identified as Anil
Kumar and Rajiv Goel (both 51) were arrested on Friday, said
Preet Bharara, the US Attorney for the Southern District of
While Rajaratnam is a resident of New York, Kumar and
Goel live in California. The other three involved in this
case are Danielle Chiesi (43) from New York, Robert Moffat
(53) from Connecticut and Mark Kurland (60) from New York.
If convicted all of them face imprisonment of up to 20
years, according to the indictment, which reads that the
defendants "routinely received inside information directly or
indirectly from insiders and provided it to each other for the
purpose of trading based on the information", filed in the US
Noting that this should be a wakeup call for the Wall
Street, Bharara -– an Indian American recently appointed to
this powerful post by US President Barack Obama -- termed it
as a decisive action against fraud on the Wall Street.
Meanwhile, the Wall Street Journal reported that
Rajaratnam was among several wealthy Sri Lankans in US whose
donations to a Maryland-based charity made their way to the
Rajaratnam`s attorney Jim Walden said his client was
innocent and will fight the insider-trading charges, the
He also said that the Tamil-origin billionaire had
made charitable donations "to rebuild homes" destroyed by the
devastating tsunami in Sri Lanka and other Indian Ocean
nations in 2004, but had no links to LTTE, it said
Rajaratnam, Kurland, Chiesi, and others repeatedly
traded on material, non-public information given as tips by
insiders and others at hedge funds, public companies, and
investor relations firms -- including Intel, IBM, McKinsey,
Moody`s Investors Services Inc., Market Street Partners,
Akamai Technologies, Inc. and Polycom Inc.
As a result of their insider trading, Rajaratnam,
Chiesi, Kurland and others earned millions of dollars of
illegal profits for themselves and the hedge funds with which
they were affiliated.
One of the insiders, Kumar, profited from investments
in Galleon. Goel, also an insider, received profitable trades
in a personal account managed by Rajaratnam, the complaints
Telephone conversations between Rajaratnam and Chiesi,
revealed that Rajaratnam, Kurland, Chiesi and the CW
routinely received inside information directly or indirectly
from insiders and provided it to each other.
Galleon Group is a hedge fund with up to USD 7 billion
in assets under management. Out of the USD 20 million,
Rajaratnam alone made USD 12.7 million in illegal profits for