A former Wall Street titan was convicted today of making a fortune by coaxing a crew of corporate tipsters to give him an illegal edge on trades in technology and other stocks. Prosecutors called it the largest insider trading case ever involving hedge funds. Sri Lanka-born Raj Rajaratnam was convicted of five conspiracy counts and nine securities fraud charges at the closely watched trial in federal court in Manhattan. The jury had deliberated since April 25.
Prosecutors alleged the 53-year-old Rajaratnam made profits and avoided losses totaling more than $60 million from illegal tips. His Galleon Group funds, they said, became a multibillion-dollar success at the expense of ordinary stock investors who didn't have advance notice of the earnings of public companies and of mergers and acquisitions. Rajaratnam will remain free on bail, though now with electronic monitoring, at least until his July 29 sentencing.