The verdict is in: Galleon founder Raj Rajaratnam has been found guilty of all counts.
After almost two weeks of jury deliberations, he was charged and found guilty of 14 counts of securities fraud and conspiracy: 9 of those counts pertained to insider trading, and the remaining 5 counts were on conspiracy to commit fraud.
Under federal sentencing guidelines, Raj could spend the rest of the his life in prison.
His defence says it will appeal the verdict.
“We’ll see you on the second circuit,” John Dowd remarked outside court.
Raj sat “stoically waiting” as the jury entered the room according to a CNBC reporter who was inside the court.
Courtney Comstock, who was in the courtroom, said that Raj appeared nervous and “ran his finger around the collar of his shirt” as the verdict was read out. “Overall, he took it like a man,” Courtney told us.
The CNBC reporter said that it was clearly obvious that the jurors had come to a guilty verdict, because “they averted their eyes” as they re-entered the court.
Raj now faces up to 15-and-a-half to 19-and-half-years in jail. Sentencing guidelines are “advisory” and judge’s don’t have to adhere to them.
Having said that, judges “feel comfortable” with those guidelines, according to a legal expert on CNBC.
The billionaire Galleon chief was accused of making over $63.8 million in illegal profits from trades based on insider tips on public companies including Clearwire, Hilton, Google and Intel.
Of course, this is an enormous victory for federal prosecutors, who began this investigation years ago. Raj was arrested in 2009.
Reed Brodsky, who prosecuted the case, declined to comment as he exited the courthouse, but had a big smile on his face.
Attorney Preet Bharara said of the result,
Rajaratnam, once a high-flying billionaire and hedge fund manager, is now a convicted felon, 14 times over. Rajaratnam was among the best and the brightest – one of the most educated, successful and privileged professionals in the country.
Yet, like so many others recently, he let greed and corruption cause his undoing. The message today is clear — there are rules and there are laws, and they apply to everyone.”
Multiple cooperating witnesses — from his former employees to former best friends — testified in the months-long trial that not only did Raj insider trade, but conspired with others to conceal what he was doing.
Wiretaps played for jurors showed a billionaire hedge fund manager sometimes gloating about receiving insider tips from board members and top executives at Goldman Sachs and tech companies like IBM and Intel.
Many will say that the never-ending supply of damning wiretaps will have been a major factor in the jury’s decision.
Full sentencing proceedings will not begin yet and he is due to be sentenced on July 29th. He will be free on bail — set at $100 million, $20 million in cash and property — until that time. While Raj’s family is in New York, prosecutors have consistently argued that due to his wealth, he is a serious flight risk.
Courtney Comstock reports that he will be electronically monitored.
With Rajaratnam standing behind him, his attorney John Dowd made a short comment outside the courtroom: “The score is 23-14 in favour of the defence — we’ll see you in the second circuit.”
Raj, surrounded by a throng of reporters and photographers, was then ushered into a silver Mercedes.
The government’s press release on the conviction is below.