Raj Rajaratnam Defends the Actions That Sent Him to Prison
Raj Rajaratnam Defends the Actions That Sent Him to Prison
(Bloomberg) -- Raj Rajaratnam, the mastermind of what prosecutors called one of the largest hedge fund insider-trading rings in U.S. history, maintained his innocence, criticized the rules that convicted him and said he’s back trading stocks.
“The insider-trading laws are murky,” Rajaratnam said Friday in an interview with Bloomberg Television, adding that all the trades questioned at his trial were based on his analysts’ written analysis.
“I did listen to people but I never traded on that,” he said. “We showed that every conversation we had was in the public domain.”
Rajaratnam, 64, was released from federal prison in 2019, after serving almost eight years of an 11-year sentence. He’s now promoting a new book -- “Uneven Justice: The Plot to Sink Galleon” -- set to be released next week.
Rajaratnam, whose Galleon Group LLC once managed more than $7 billion, was convicted in 2011 on 14 counts stemming from a seven-year plot to trade on inside information from corporate executives, bankers, consultants, traders and others.
The Sri Lankan native was perhaps the highest-profile figure ensnared in a years-long crackdown on insider trading at hedge funds.
Arrested in an early-morning FBI raid in October 2009, he was in the first wave of defendants charged by federal prosecutors in New York -- with dozens of other traders, executives and company insiders accused in the years that followed. His sentence was one of the longest.
In a lawsuit brought by the U.S. Securities and Exchange Commission, Rajaratnam was ordered to pay $93 million in civil penalties, while the judge in his criminal case required him to forfeit $54 million and pay $10 million in fines.
Then-U.S. Attorney Preet Bharara’s legal attack on Wall Street also targeted Steve Cohen’s SAC Capital Advisors, which pleaded guilty to insider-trading charges in 2013. SAC agreed to pay $1.8 billion and close its investment advisory business. The firm changed its name to Point72 Asset Management. Cohen, who now owns the New York Mets, was never charged.
In addition to proclaiming his innocence, Rajaratnam is once again trading tech stocks, as well as wagering on cryptocurrencies, sports betting, gaming and medical-technology companies, he said. His biggest wager is cybersecurity company Crowdstrike Holdings Inc., he said.
©2021 Bloomberg L.P.