The Galleon Cases and Trends in Insider Trading Investigation, Prosecution and Enforcement. Presented by: DLA PIPER LLP (US). Government Lawyers Are Saying.
The Galleon Cases and Trends in Insider Trading Investigation, Prosecution and Enforcement
DLA PIPER LLP (US)
“[The Galleon case is] a wake-up call for every hedge fund manager and every Wall Street trader and every corporate executive who is even thinking about engaging in insider trading.”
“As the defendants in this case have now learned the hard way, they may have been privy to a lot of confidential corporate information, but there was one secret they did not know: We were listening. Today, tomorrow, next week, the week after, privileged Wall Street insiders who are considering breaking the law will have to ask themselves one important question: Is law enforcement listening?”
“Unlawful insider trading should be offensive to everyone who believes in, and relies on, the market. It cheats the ordinary investor, victimizes the companies whose information is stolen, and is an affront not only to the fairness of the market, but the rule of law. In just over 18 months, this office has charged 47 individuals with insider trading crimes; Rajaratnam is the 35th person to be convicted. We will continue to pursue and prosecute those who believe they are both above the law and too smart to get caught."
-- Preet Bharara
U.S. Attorney for the Southern District of New York
-- Robert Khuzami
Director of Enforcement Securities Exchange Commission
“In several indictments involving expert networks, authorities claim that hedge fund managers paid outside consultants handsome fees for providing nonpublic information. The government has also charged executives at the expert network firms, the ones who brokered the connections, with knowingly facilitating the exchange of illegal stock tips.”
“Prosecutors say the money managers often sought impending information on large technology companies, like Apple and Dell, whose stocks can turn quickly on tidbits about financial performance and forthcoming products.”
- New York Times
Nuts and Bolts and Lessons of the Raj Rajaratnam Verdict
Query: What if one piece of information included in the mosaic is independently material?
Situation on the Ground
Numerous public companies and their employees under scrutiny.
Lessons and Responses
Example: Rajat Gupta
Questions and Answers