Raj Rajaratnam's life has just changed profoundly. The 52-year-old founder, fund manager, and partner at the Galleon Group has been accused of insider trading, conspiring with others (now named as defendants with him) to trade shares of Google (NASDAQ: GOOG), Hilton (OTC: HLNQ), and Sun Microsystems (NASDAQ: JAVA), among others. Rajaratnam generated $25 million in profits on these trades, but that's moot now.
Rajaratnam, who is #559 on the list of the world's richest people, with a net worth of $1.3 billion, now faces fines of up to $250,000 and from 5 to 20 years in prison. I doubt he'll be in the same slot on next year's list of billionaires.
There isn't much Galleon could conceivably say about the situation. For now, the company is only releasing, "We had no knowledge of the investigation before it was made public and we intend to cooperate fully with the relevant authorities," according to a report in USA Today. The company also noted that it "continues to operate and is highly liquid."
Joining Rajaratnam as defendants are Danielle Chiesi and Mark Kurkland of New Castle, Anil Kumar of McKinsey & Co., Rajiv Goel of the investment group in Intel (NASDAQ: INTC), and Robert Moffat, an executive at IBM (NYSE: IBM).
Closing Bell: When We All Love the PIIGS (NBG, SQNM, PG, ERTS, KO)
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
