James Saft is a Reuters columnist. The opinions expressed are his own.
HUNTSVILLE — If you as an investor think that insider dealers like Raj Rajaratnam are a top concern then I have a bridge, or perhaps an intricate highly-structured investment vehicle, to sell you.
Rajaratnam, the erstwhile billionaire and founder of hedge fund Galleon Group, was found guilty of 14 counts of securities fraud and conspiracy charges on Wednesday in a case that unveiled multiple instances of Rajaratnam obtaining and acting on inside information.
This has prompted all sorts of silliness to be asserted to the effect that the conviction will either restore investors’ faith in U.S. financial markets or stand as a testament to why investors don’t believe they will get a fair shake.
To be sure, much of the trial was genuinely shocking, not least allegations that Rajat Gupta, one-time global head of consultants McKinsey, and then a serving board member at Goldman Sachs, had called Rajaratnam within minutes of leaving board meetings. One call, which Rajaratnam was alleged to have acted on, took place 23 seconds after the meeting was gaveled. This is the Wall St. equivalent of finding out that the Pope leads black masses or seeing the Dalai Lama ringside at a dog fight.
Gupta, who denies wrongdoing, faces civil insider trading charges from the Securities and Exchange Commission.