It was 6 a.m. on Oct. 16, 2009, and Raj Rajaratnam, head of the Galleon Group hedge fund, was at home on his exercise bike looking out over Manhattanâs Turtle Bay, thinking about how many shirts he would have to pack for his trip to England that day. He was to go there to launch a $200 million fund to invest in the Sri Lankan stock market, in which he, the richest Sri Lankan on the planet, was the biggest single investor.
At 6:30 his doorbell rang. He answered it to find a number of policemen and men in suits outside. An FBI agent named B. J. Kang told him he was under arrest for insider trading. There were five other agents with him, come to collect Rajaratnam. They asked if he had a gun, if he had drugs on the property. For a moment he was afraid they would plant something.
As they led him away from his family, Rajaratnam says Kang told him, âTake a good look at your son. Youâre not going to see him for a long time.â He added, for good effect, âYour wife doesnât seem so upset. Because sheâs going to spend all your money.â
The interrogation, at the FBI office in lower Manhattan, lasted eight hours. They put a laptop in front of him and pressed a button. He heard the voice of his wife picking up his home phone. âHello?â Then they clicked on another button and his voice came on, on his cellphone, talking to his Wharton classmate and friend Anil Kumar, discussing business matters at McKinsey, where Kumar worked. On the same day, Kumar and another Wharton classmate, Rajiv Goel, were charged with insider trading.
Two FBI agents, wearing prominently displayed guns, played good cop, bad cop. They thumped tables, jumped up and down, told him, âJust say you did it to one count!â But the suspectâwho chose not to call a lawyerâwas uncooperative. âIn my head I was saying, âYou canât intimidate me! Iâm from Sri Lankaâ?ââwhere prisoners have to deal with much worse. They wanted him to turn in other hedge-fund managers. They wanted him, especially, to wear a wire and tape his conversations with Rajat Gupta, the former CEO of McKinsey. Gupta, whom Rajaratnam refers to as a âfirst-class guy,â was the most respected Indian executive in the U.S.
After the interrogation, they led Rajaratnam outside in handcuffs and paraded him in front of reporters for a perp walk. It was the most dramatic moment in a four-year investigation led by Preet Bharara, the U.S. attorney in Manhattan.
It was Rajaratnamâs understanding that were he to plead guilty and wear a wire, he might be offered a sentence of as little as five years. With good behavior, he could be out in 85 percent of that time. The evidence on the wiretaps was incontrovertible. It was his voice on the phone asking a variety of informants about companies he was investing in, and giving them loans and other monetary rewards in exchange.
Of the 50-odd people caught up in the insider-trading scandal, âmost everyone thatâs been charged has pled guilty,â notes Rajaratnam. âNobodyâs fought it. Theyâve taken the plea.â But he decided to plead not guilty, and was later convicted on all 14 counts of insider trading, and is now going to jail for 11 years.
Why didnât he take the plea?
Rajaratnam was a man who lived for information; his entire business edge was built on acquiring information before others did. But when it came to the biggest bet of his life, this master of information was guidedâas he saw itâby the political history of his people, his personal journey as a dark-skinned immigrant through the rich countries, and a 3,000-year-old tradition of astrology.
Link to entire article: http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html
At 6:30 his doorbell rang. He answered it to find a number of policemen and men in suits outside. An FBI agent named B. J. Kang told him he was under arrest for insider trading. There were five other agents with him, come to collect Rajaratnam. They asked if he had a gun, if he had drugs on the property. For a moment he was afraid they would plant something.
As they led him away from his family, Rajaratnam says Kang told him, âTake a good look at your son. Youâre not going to see him for a long time.â He added, for good effect, âYour wife doesnât seem so upset. Because sheâs going to spend all your money.â
The interrogation, at the FBI office in lower Manhattan, lasted eight hours. They put a laptop in front of him and pressed a button. He heard the voice of his wife picking up his home phone. âHello?â Then they clicked on another button and his voice came on, on his cellphone, talking to his Wharton classmate and friend Anil Kumar, discussing business matters at McKinsey, where Kumar worked. On the same day, Kumar and another Wharton classmate, Rajiv Goel, were charged with insider trading.
Two FBI agents, wearing prominently displayed guns, played good cop, bad cop. They thumped tables, jumped up and down, told him, âJust say you did it to one count!â But the suspectâwho chose not to call a lawyerâwas uncooperative. âIn my head I was saying, âYou canât intimidate me! Iâm from Sri Lankaâ?ââwhere prisoners have to deal with much worse. They wanted him to turn in other hedge-fund managers. They wanted him, especially, to wear a wire and tape his conversations with Rajat Gupta, the former CEO of McKinsey. Gupta, whom Rajaratnam refers to as a âfirst-class guy,â was the most respected Indian executive in the U.S.
After the interrogation, they led Rajaratnam outside in handcuffs and paraded him in front of reporters for a perp walk. It was the most dramatic moment in a four-year investigation led by Preet Bharara, the U.S. attorney in Manhattan.
It was Rajaratnamâs understanding that were he to plead guilty and wear a wire, he might be offered a sentence of as little as five years. With good behavior, he could be out in 85 percent of that time. The evidence on the wiretaps was incontrovertible. It was his voice on the phone asking a variety of informants about companies he was investing in, and giving them loans and other monetary rewards in exchange.
Of the 50-odd people caught up in the insider-trading scandal, âmost everyone thatâs been charged has pled guilty,â notes Rajaratnam. âNobodyâs fought it. Theyâve taken the plea.â But he decided to plead not guilty, and was later convicted on all 14 counts of insider trading, and is now going to jail for 11 years.
Why didnât he take the plea?
Rajaratnam was a man who lived for information; his entire business edge was built on acquiring information before others did. But when it came to the biggest bet of his life, this master of information was guidedâas he saw itâby the political history of his people, his personal journey as a dark-skinned immigrant through the rich countries, and a 3,000-year-old tradition of astrology.
Link to entire article: http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html
