This is kinda amazing.
Sure, scandals and desis are never far from each other. Close acquaintances, really.
Desis in the U.S. are forever involved in some nasty case or the other.
But the Galleon Group hedge fund scandal currently rocking Wall Street is a new high water mark – Five desis count among the dramatis personae. No kidding, folks. Five desis.
* First, there’s the Galleon Group founder and billionaire Raj Rajaratnam, a Tamil from Sri Lanka, who is alleged to have benefited from insider trading. See details of the government’s charges against Rajaratnam here.
* Then, there’s Rajiv Goel, a director of strategic investments at Intel Capital. Goel is also charged with participating in insider trading schemes. The press release from the U.S. Attorney’s office alleges that Rajaratnam and Goel engaged in insider trading schemes involving the stock of Clearwire.
* McKinsey director Anil Kumar is also charged with participation in insider trading. The government complaint alleges that from around August 2008 until about October 2008, Rajaratnam, Anil Kumar and others engaged in insider trading based on inside information pertaining to AMD.
* Today’s Wall Street Journal alleges that Deep Shah, who served as a junior analyst with tainted rating agency Moody’s, passed on inside information to a third party about Blackstone Group’s pending $26 billion takeover of Hilton Hotels. The unidentified third party in turn is said to have passed on the tip to Rajaratnam, who the government complaint alleges made a profit of $4 million by buying hundreds of thousands of shares of Hilton stock. Deep Shah, who has not been charged in the case, is said to be back in India.
* Finally, we have the good guy Preet Bharara, U.S. Attorney for the Southern District of New York and the prosecutor in this case.
While announcing the charges against Rajaratnam et al, Bharara declared:
This case should be a wake up call for Wall Street. It should be a wake up call for every hedge fund manager and every Wall Street trader and every corporate executive who is even thinking about engaging in insider trading. As the defendants in this case have now learned the hard way, they may have been privy to a lot of confidential corporate information, but there was one secret they did not know: we were listening. Today, tomorrow, next week, the week after, privileged Wall Street insiders who are considering breaking the law will have to ask themselves one important question: Is law enforcement listening?
If convicted, Rajaratnam, Rajiv Goel and Anil Kumar could be put away in prison for lengthy terms because the maximum penalty for the crimes they are alleged to have committed is 20 years.
It’s important to keep in mind that mere charges by the government against someone does not constitute guilt. In our judicial system, there is the presumption of innocence for all persons charged with a crime unless and until proven guilty in a court of law.