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Galleon US insider trading trial begins Galleon US insider trading trial begins
(about 2 hours later)
The long-awaited trial of billionaire hedge fund manager Raj Rajaratnam on charges of insider trading begins later in New York.The long-awaited trial of billionaire hedge fund manager Raj Rajaratnam on charges of insider trading begins later in New York.
Prosecutors allege that Mr Rajaratnam made about $45m (£28m) in illegal profits from inside information.Prosecutors allege that Mr Rajaratnam made about $45m (£28m) in illegal profits from inside information.
Some of Wall Street's best-known names could testify in the the trial, which is is expected to last several weeks.Some of Wall Street's best-known names could testify in the the trial, which is is expected to last several weeks.
Mr Rajaratnam, who was arrested in October 2009, has pleaded not guilty to the charges laid against him.Mr Rajaratnam, who was arrested in October 2009, has pleaded not guilty to the charges laid against him.
He is currently free on bail of $100m. If found guilty, he could face more than 20 years in jail. He was met by photographers and camera crews as he arrived at the New York court for jury selection.
He has been free on bail of $100m. If found guilty, he could face more than 20 years in jail.
Phone tapsPhone taps
They will be paying close attention to the outcome of the trail in financial circles. They will be paying close attention to the outcome of the trial in financial circles.
Information is the lifeblood of traders. But there's a fine line between acting on rumours and tips and acting on information that's private. Information is the lifeblood of traders. But there's a fine line between acting on rumours and tips, and acting on information that's private.
The government hopes this will help redefine that line which is why this case could change how business is done on Wall Street. The government hopes this will help redefine that line, which is why this case could change how business is done on Wall Street.
The New York federal prosecutor has described the case as the "largest hedge fund insider trading case in history".The New York federal prosecutor has described the case as the "largest hedge fund insider trading case in history".
More than 20 people, including employees of some of America's biggest companies, including IBM and Intel, have been criminally or civilly charged in the complex case, which involved the widespread use of phone tapping. The Securities and Exchange Commission (SEC) said in its complaint filed earlier this year that the case involved "widespread and repeated insider trading" at a number of hedge funds, including Galleon.
The insider trading is said to have taken place between January and July 2007. According to the SEC, the alleged unlawful trading involved the use of inside information on companies including Hilton Hotels and Intel.
Incidents cited in court documents describe the passing of information on takeovers or company results before they were publicly released.
Mr Rajaratnam then traded on that information, often on behalf of Galleon, the SEC alleges.
The US financial regulator estimated that the scheme generated $52m in "illicit profits or losses avoided".
Mr Rajaratnam founded the Galleon Group hedge fund, which managed about $7bn at the time of his arrest.Mr Rajaratnam founded the Galleon Group hedge fund, which managed about $7bn at the time of his arrest.
His personal wealth has been estimated at about $1.3bn.His personal wealth has been estimated at about $1.3bn.
More than a dozen people, including employees of some of America's biggest companies, including IBM and Intel, have been criminally or civilly charged in the complex case.
So far 19 have pleaded guilty.