Who Is Raj Rajaratnam
Raj Rajaratnam is a former hedge fund manager and founder of the Galleon Group, a multi-billion dollar New York-based hedge fund that became central to one of the largest insider trading cases in U.S. history. He was born in Sri Lanka and later became a U.S. citizen, building a career in finance and technology before founding Galleon in 1997 Forbes.
Rajaratnam built Galleon into a prominent hedge fund with exposure to technology, healthcare, and consumer stocks, managing billions in assets at its peak. He was also a former managing director at Needham & Company and a board member of several public companies before his arrest in 2009 SEC.
Raj Rajaratnam Insider Trading Conviction and Sentence
Galleon Group Insider Trading Scandal
In October 2009, Rajaratnam was arrested by the FBI and charged with securities fraud and conspiracy for running a widespread insider trading scheme. Prosecutors alleged he obtained confidential earnings information from corporate insiders, including executives at McKinsey & Company, Goldman Sachs, and Intel, and used it to trade Galleon portfolios for profit.
In May 2011, Rajaratnam was found guilty on all 14 counts, including conspiracy and securities fraud. In October 2011, a federal judge sentenced him to 11 years in prison, the longest sentence ever imposed for insider trading at the time, along with a $10 million fine and forfeiture of over $53 million DOJ.
Raj Rajaratnam Current Status and Legacy
Prison Release and Post-Conviction Life
Rajaratnam was released from federal prison in 2019 after serving approximately eight years of his sentence. His case remains a landmark example of the use of wiretaps and digital evidence in financial fraud prosecutions and led to increased scrutiny of hedge fund compliance and insider trading enforcement.
Today, Rajaratnam's name is frequently cited in discussions of insider trading risk, hedge fund regulation, and corporate governance. His conviction contributed to stronger enforcement actions by the SEC and DOJ, and his case is studied in business schools and compliance programs as a cautionary tale about the consequences of illegal trading Forbes.