Billionaire faces insider trading charges
By Larry Neumeister |
January 7, 2010, Thursday
|
Print Edition
Print Edition
UNITED States federal prosecutors have said they will file new charges against billionaire Sri Lankan-born hedge fund operator Raj Rajaratnam alleging he made at least US$36 million from trades based on insider information, double what the government previously believed.
The government's plans were outlined in court papers filed in US District Court in Manhattan on Tuesday. Prosecutors oppose a request by lawyers for Rajaratnam to reduce his bail from US$100 million to US$25 million. Government attorneys said a rewritten indictment will be brought.
Prosecutors said they still believe Rajaratnam should be detained without bail because he is likely to flee the country because of the substantial jail time he could face after he was indicted last month on 11 felony counts of conspiracy and insider trading.
They said he has the money and connections overseas to run and no bail would guarantee he would show up for trial.
Since Rajaratnam's October arrest, the government has strengthened its case after discovering his trades led to at least US$37 million in profits, prosecutors wrote, noting there were recorded telephone calls that provide "overwhelming evidence of his guilt."
ATI acquisition
They said the government has learned that Rajaratnam obtained inside information between March and July 2006 about the acquisition of ATI Technologies Inc by Advanced Micro Devices Inc, enabling him to make at least US$19 million in illegal profits.
They said a conviction would likely lead to a prison term in excess of 15 years. Previously, they had said he would likely face no more than 10 years in prison.
Rajaratnam's lawyers say he based trades on public information.
"An analyst's prediction that AMD would acquire ATI was widely reported in the press more than seven weeks before the acquisition was announced," said Rajaratnam's lawyer, John Dowd.
The government noted that Rajaratnam is described by Forbes magazine as the world's 559th richest person, worth between US$1.3 billion and US$1.8 billion.
The government's plans were outlined in court papers filed in US District Court in Manhattan on Tuesday. Prosecutors oppose a request by lawyers for Rajaratnam to reduce his bail from US$100 million to US$25 million. Government attorneys said a rewritten indictment will be brought.
Prosecutors said they still believe Rajaratnam should be detained without bail because he is likely to flee the country because of the substantial jail time he could face after he was indicted last month on 11 felony counts of conspiracy and insider trading.
They said he has the money and connections overseas to run and no bail would guarantee he would show up for trial.
Since Rajaratnam's October arrest, the government has strengthened its case after discovering his trades led to at least US$37 million in profits, prosecutors wrote, noting there were recorded telephone calls that provide "overwhelming evidence of his guilt."
ATI acquisition
They said the government has learned that Rajaratnam obtained inside information between March and July 2006 about the acquisition of ATI Technologies Inc by Advanced Micro Devices Inc, enabling him to make at least US$19 million in illegal profits.
They said a conviction would likely lead to a prison term in excess of 15 years. Previously, they had said he would likely face no more than 10 years in prison.
Rajaratnam's lawyers say he based trades on public information.
"An analyst's prediction that AMD would acquire ATI was widely reported in the press more than seven weeks before the acquisition was announced," said Rajaratnam's lawyer, John Dowd.
The government noted that Rajaratnam is described by Forbes magazine as the world's 559th richest person, worth between US$1.3 billion and US$1.8 billion.
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