The big news coming out of the US corporate scene is that hedge fund billionaire Raj Rajaratnam has been found guilty of insider dealing. He is the highest-profile scalp in the history of such investigations in the US. He now faces up to 20 years in prison. The 53-year-old co-founder of the Galleon group has been found guilty of 14 charges of securities fraud and conspiracy.
But how widespread is the problem? How much corporate corruption is there on Wall Street? This was not an isolated incident, there's a wider culture of greed on Wall Street.
Galleon had a simple modus operandi. For a fee, networks of firms were connected with talkative corporate workers who spilled their guts. Bloomberg reports that the practice is fairly wide spread through Wall Street, many of the banks would be in on it. "The government's recent insider-trading prosecutions have shined a light on both the recent democratization and globalization of what is allegedly inside information," says Adam J. Wasserman, a white-collar criminal attorney at the Dechert law firm in New York. "It's not just in the hands of CEOs and CFOs anymore."
These are the people who lied, cheated and stole, who left hardworking families homeless and undermined the entire economy of the United States for their own personal greed. Unlike Ranjaratnam, they didn't go to jail and they still got billions in bonuses.
It's no coincidence that the Galleon case coincides with revelations that revelations from Reuters that Goldman Sachs might be charged with improperly passing along analysts' tips to top clients. Like Rajaratnam, they would have done it for a fee. Just part of the Wall Street scene.
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