Galleon insider trading

1. GALLEON GROUP
INSIDER
TRADING

2. WHAT IS INSIDER TRADING?
Insider trading refers to trading of shares by an ‘insider’ based on unpublished price sensitive
information (UPSI).
SEBI regulations define an ‘insider’ as someone who is a connected person or has access to UPSI.
A connected person can be anyone who during the six months preceding the insider trade has been
associated with the company in some way.
This could be a company director or employee or their close relatives, or a legal counsel or banker to
the company or even an official of the stock exchanges or trustees or employees of an asset
management company who interacted with the company.

3. GALLEON CASE - KEY PLAYERS

4. HOW IT STARTED ?
Raj Rajaratnam was founder of galleon group and a hedge fund manager.
Overview of hedge fund.
Investment from HNIs further invested by Rajaratnam.
Investmenat is based on insider information and tips.
Rajat Gupta and Goldman Sachs (28 Sep 2009)
Rajaratnam found guilty of 9 counts of Fraud and 5 counts of Conspiracy.

5. ABOUT THE CASE
Largest Hedge Fund Insider Trading Case in US History
$5 Billion purchase by Warren Buffett’s Berkshire Hathaway - September 2008
Rajat Gupta comes onto the scene
Wiretapes and electronic records
October 16th, 2009 - Raj Rajaratnam was arrested by the FBI
Profits of $72 million through Government Investigations

6. CHARGES AND TRIAL
October 2009 - Rajaratnam was charged with multiple counts of fraud and insider trading.
Apart from Rajaratnam, Danielle Chiesi (Goldman Sachs) an investment consultant, and 15 other executives
were also charged with the offense.
Rajaratnam profited from information received from:
Robert Moffat, a senior executive of IBM, considered next in line to be CEO.
Anil Kumar, a senior executive of McKinsey & Company, and close friend of Rajat Gupta who was later also
convicted of passing information to Rajaratnam.
Rajiv Goel, a midlevel Intel Capital executive.
Roomy Khan, previously convicted of wire fraud for providing inside information from her employer, Intel, to
Rajaratnam.
Rajat Kumar Gupta, former CEO Mckinsey & Co., director at Goldman Sachs.
Rajaratnam pleaded not guilty and remained free on $100 million bail, the largest in United States history.

7. December 2009 - indicted by a grand jury
May 2011 - found guilty in U.S. District Court on 14 charges.
October 13, 2011 - sentenced by U.S. District Judge Richard Holwell to 11 years in prison on.
He was fined $150 million.
S. Attorney Preet Bharara put the total profits in the scheme at over $60 million
CHARGES AND TRIAL CONT…

8. CONCLUSION

9. THANK YOU!