Rich Guys Club

It is one of the biggest mysteries on Wall Street: Who is Tipper X, the secret witness at the center of the biggest insider-trading case in a generation?

The answer is Thomas Hardin—a young investment analyst who, the authorities claim, traded on inside information and may now lead prosecutors to other crucial players in the sprawling investigation into the billionaire Raj Rajaratnam and his hedge fund, the Galleon Group.

Mr. Hardin, 32, is one of three people named on a list of potential witnesses that the Securities and Exchange Commission recently provided to Mr. Rajaratnam and other defendants, according to people close to the case. The other two named were Ian P. Murray, a hedge fund manager in New York who has not been charged with wrongdoing, and Gustavo D’Souza, whose business affiliation and connection to the case, if any, were not immediately clear.

Read More: – By Zachery Kouwe, The New York Times

Accused insider trader and billionaire founder of Galleon Group hedge fund Raj Rajaratnam may have reaped double the amount first believed from his alleged illegal trading according to a filing by federal prosecutors.

Prosecutors say Rajaratnam, who was accused last year alongside nearly two dozen others, may have scored as much as $36 million from his trading schemes, including some $19 million from a tip about the acquisition of ATI Technologies Inc. by Advanced Micro Devices Inc. (AMD). Prosecutors originally believed the hedge-fund magnate’s take from the trades was $17 million.

The revelation could result in another indictment against the disgraced trader, who last year appeared on Forbes Magazine’s list of wealthiest people, federal prosecutors say.

The filing also alleges that Rajaratnam paid the tipster for the information in 2006 and had been paying an “inside source” for information since 2004.

Read More: – By Darryl R. Isherwood, FOXBusiness

The feds may have a canary in their cage.

An ex-senior partner at McKinsey & Co., who was caught up in the recent insider-trading scandal involving hedge fund Galleon Group, has taken the first steps toward what may be a guilty plea, according to court filings.

That means Anil Kumar, one of the dozen-plus people who have been slapped with criminal charges in the case, could become a star witness against Galleon bigwig Raj Rajaratnam.

Yesterday, government prosecutors put in a request to the US District Court of the Southern District of New York that was signed by Kumar’s attorney, Robert Morvillo.

The document, which consisted of a single sentence, informed the court that the US Attorney’s office will file “an information,” in what legal experts say is Kumar’s first step toward waiving his right to be indicted by a grand jury.

The filing suggests that Kumar, 51, may plead guilty — or that he may have reached a deal with prosecutors.

Kumar’s lawyer, Morvillo, didn’t respond to a request for comment.

Read More: – Kaja Whitehouse, New York Post

Galleon hedge fund founder Raj Rajaratnam and co-defendant Danielle Chiesi pleaded not guilty on Monday to charges of securities fraud in what U.S. prosecutors describe as the biggest hedge fund insider trading case ever.

Sri Lankan-born Rajaratnam, 52, is the most prominent defendant among 21 people criminally or civilly charged in an insider trading case involving employees of some of America’s best-known companies, including IBM Corp , McKinsey & Co and Intel Capital, an arm of Intel Corp.

Rajaratnam and Chiesi, a former employee of New Castle Funds LLC, pleaded “not guilty” to charges of securities fraud and conspiracy to commit securities fraud at a hearing before Judge Richard Holwell on Monday at U.S. District Court in Manhattan.

Rajaratnam and Chiesi, 44, are the only defendants to be formally indicted so far. Both have been out on bail since their October 16 arrest.

No changes were made to Rajaratnam’s bail status at the hearing. A separate bail hearing is scheduled for January 8.

Read More: – Reuters

Raj Rajaratnam, the billionaire Galleon Group LLC founder, and Danielle Chiesi, an executive at New Castle Funds LLC, were indicted by a federal grand jury for using inside information to profit from stock trades.

The indictment includes 11 counts of securities fraud and conspiracy against Rajaratnam and 10 counts against Chiesi stemming from trades that allegedly generated more than $20 million in illegal profits. It cites multiple schemes dating to 2003 and says the two used secret tips to trade in stocks including Polycom Inc., Hilton Hotels Corp, Akamai Technologies Inc., Google Inc. and International Business Machines Corp.

“Mr. Rajaratnam is innocent and looks forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence,” his lawyer, John Dowd, said in a statement.

Rajaratnam, 52, and Chiesi, 44, were accused in an Oct. 16 criminal complaint of participating with four others in a wide- ranging insider trading case. Yesterday’s indictment formalizes the charges against Rajaratnam and Chiesi, who live in New York, and moves their case toward a trial. U.S. District Judge Richard Holwell in Manhattan will preside. A court hearing is scheduled for Rajaratnam and Chiesi on Dec. 21.

Read More: -By David Glovin, Bloomberg

From Reuters

Lawyers for Raj Rajaratnam, the Galleon hedge-fund founder accused in a coast-to-coast insider trading probe, asked a New York judge Monday to reduce his bail, taking aim at the government’s reliance on a cooperating witness.
The Sri Lankan-born billionaire is among a score of traders and employees of some of America’s best-known companies charged in October and November in what U.S. prosecutors described as the biggest hedge fund insider trading case ever.
Papers filed in Manhattan federal court requested bail be reduced to $20 million from $100 million for Rajaratnam, who is a U.S. citizen. A similar request to the court on Nov. 5 was rejected. Rajaratnam has been free on bail since his Oct. 16 arrest, with some travel restrictions.

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San Jose Mercury News-McClatchy Tribune Information Services via Comtex

The spotlight in the Galleon insider trading scandal has focused on Rajaratnam, a larger-than-life operator of the $7 billion Galleon hedge fund in New York, but the case also has upended the lives of his contacts in the valley. Many are successful valley executives who now are caught in the glare of a national scandal.
A few have pleaded guilty and turned against Rajaratnam. Others are fighting criminal charges in the case. Still others who haven’t been charged have been put on leave by their employers or have resigned prestigious directorships in public companies.

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From FIN Alternatives

In an echo of the Bernard Madoff case, prosecutors looked into alleged insider-trading by Galleon Group founder Raj Rajaratnam more than 10 years ago.
That investigation centered around Rajaratnam’s trading of Intel Corp. shares. According to recently unsealed court documents, the chip maker began to suspect that Rajaratnam was receiving tips from within the company in the early 1990s, when he was a stock analyst at Needham & Co. But, much like the Securities and Exchange Commission in the Madoff situation, prosecutors were unable to make the case.

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By Jonathan Stempel and Grant McCool

NEW YORK (Reuters) – Galleon Group hedge fund founder Raj Rajaratnam, accused in one of the biggest insider trading cases ever, on Tuesday gave a detailed denial of the charges and said government wiretaps violated his constitutional rights.

Twenty people, including the Sri Lankan-born billionaire, face criminal charges, civil charges or both in an investigation in which court-approved wiretaps were used in a Wall Street insider trading probe for the first time.

“Electronic surveillance is permitted only when necessary for the investigation of specified crimes and only when alternative investigative procedures have been tried or appear unlikely to succeed,” Rajaratnam’s lawyers said in a Manhattan federal court filing, answering civil charges brought by the U.S. Securities and Exchange Commission.

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By Katherine Burton and Saijel Kishann, Bloomberg

Oct. 22 (Bloomberg) — Roomy Khan, the informant who is cooperating with prosecutors in the insider-trading case against Galleon Group LLC co-founder Raj Rajaratnam, previously worked at Intel Corp., according to two people who know her.
Information provided by Khan was central to the investigation that led to the arrests of six people, according to a person familiar with the probe, who asked not to be identified because Khan’s name wasn’t disclosed by the government. Khan’s link to Intel is significant because it shows that Rajaratnam may have had more than one inside source at the Santa Clara, California-based semiconductor maker.
Khan, identified by a U.S. Securities and Exchange Commission complaint as “Tipper A,” is a hedge-fund manager who worked for Galleon in the 1990s and sought to rejoin Rajaratnam in late 2005 when facing financial difficulties, according to the agency’s complaint. The Wall Street Journal first reported Khan’s identity yesterday. Khan is identified in the criminal case as “CW,” for cooperating witness.

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