Illegal Insider Trading: Lawyers, Hedge Funds, Consultants, and Corporate Officers - Oh My!

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If you want to know how business is really conducted in the U.S., pay attention to the Galleon Group, LLC case. A phalanx of lawyers, hedge funds, consultants, and corporate officers allegedly conspired to use insider information to earn illegal profits.

Galleon Group, LLC is a U.S. hedge fund founded by Raj Rajaratnam. Mr. Rajaratnam is a billionaire accused of illegal insider trading. He has plead not guilty. Why would a billionaire commit illegal insider trading? Maybe that is how he became a billionaire.

Several people have plead guilty to conspiracy and securities fraud. I will provide updates on the Galleon Group, LLC case as information becomes available. Here are some of the people who have plead guilty.

Mark Lenowitz, Q Capital Investment Partners, LP, Sentenced to 3 years probation.

Steven “Tuna” Fortuna, Hedge Fund Manager, Plead guilty to insider trading.

Roomy Khan, Former Intel employee, plead guilty on October 19, 2009.

Anil Kumar, Former McKinsey & Co. employee, plead guilty to conspiracy and securities fraud on January 7, 2010.

Richard C.B. Lee, hedge fund manager, plead guilty.

Brien Santarlas, Ropes & Gray, LLP law firm, plead guilty on December 10, 2009.

Gauthan Shankar, Schottenfeld Group, LLC hedge fund, plead guilty to insider trading charges.

David Slaine, Chelsey Capital hedge fund, plead guilty.

What does this mean to you? Know that lawyers, consultants, hedge funds, and corporate officers of publicly traded businesses will and do commit illegal insider trading. It is almost impossible to prosecute these people. When doing business in America, know that many in the financial community are trying to extract information from you so they can commit illegal insider trading. You have been warned. This is how business is now done in America.

Notice that Mr. Lenowitz only received three years probation. Those who commit illegal insider trading get light sentences. Lenient sentences ensure that financial professionals will continue to commit illegal insider trading. Congratulations to the U.S. justice system for perpetuating the financial rape of the American people.