The Rajaratnam Conviction: How Big a Victory?
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Congratulations to the prosecutors and FBI agents responsible for the sweeping insider-trading conviction on May 11 of Raj Rajaratnam. The good guys won a round. Do not, however, take the wrong lesson from the government's triumph. The nailing of the Galleon Group hedge fund tycoon doesn't mean the end of insider trading any more than a roundup at Rick's Cafe meant the end of gambling in Casablanca. What the seven-week trial revealed is that insider trading is even more pervasive than previously thought.
Even as the Feds use wiretaps and other sophisticated methods to police the financial industry, the schemers and schemes are proliferating. Wall Street, the Galleon case shows, is all about insider trading.