Raj Rajaratnam

What the public record shows

Raj Rajaratnam, founder of the multibillion-dollar Galleon Group hedge fund, was convicted on May 11, 2011 on all 14 counts of conspiracy and securities fraud after an eight-week jury trial. On October 13, 2011, he was sentenced to 11 years in prison — at the time, the longest insider-trading sentence in U.S. history — plus a $10 million fine and $53.8 million forfeiture. He served roughly 7.5 years. This is a criminal conviction — not an allegation.

The scheme

According to the U.S. Attorney’s Office for the Southern District of New York:

• Rajaratnam ran a network that traded on material, non-public information — advance knowledge of earnings, acquisitions, and other market-moving events — fed to him by insiders at public companies and other funds.
• The case was a landmark: the first major insider-trading prosecution built on wiretaps, with jurors hearing Rajaratnam’s own recorded calls.
• It ensnared a web of corporate insiders and consultants, several of whom were also convicted.

Why we rate this 1 / 10 — Avoid

A jury conviction on every count and a record sentence. Insider trading isn’t a victimless technicality — it’s theft from every investor on the other side of the trade, who bought or sold without the information the insider had.

Verify it yourself

• FBI and DOJ press releases — linked in Sources.
• SEC litigation records — the parallel civil case, SEC v. Galleon Management.

Bottom line

Convicted and imprisoned. A manager whose “edge” is secret information is running a crime, not a strategy — and when it unravels, investors are the ones left holding it.

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