Federal authorities have arrested six people in a hedge fund insider trading case that they say led to $20 million in illegal profits.
A billionaire hedge fund boss was among five men and a woman arrested by federal authorities Friday in a hedge fund insider trading case that prosecutors say reaped $20 million in illegal profits.
Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to cause trades based on insider information about three publically traded companies.
Those companies were identified in court papers as Polycom, Hilton Hotels Corp. and Google Inc.
According to the court papers, Rajaratnam obtained insider information and then caused the Galleon Technology Funds to execute trades that earned a profit of more than $12.7 million between January 2006 and July 2007. Other schemes garnered millions more, authorities said.
Five others charged in the scheme included Rajiv Goel, a director of strategic investments at Intel Capital, the investment arm of Intel Corp., Anil Kumar, a director at McKinsey & Co. Inc., a global management consulting firm and Robert Moffat, senior vice president and group executive at International Business Machines Corp.'s Systems and Technology Group.
It was not immediately clear who was representing the lawyers in court appearances scheduled for U.S. District Court in Manhattan later Friday.
Prosecutors charged the defendants with conspiracy and securities fraud.
A news conference was scheduled Friday afternoon by federal prosecutors and the Securities and Exchange Commission to explain the charges further.
