When Sri Lankan-born hedge fund owner Raj Rajaratnam goes on trial late on Tuesday here in one of the biggest insider trading cases in the US, he will be up against two Indian-origin people directly, and a third indirectly.
Preet Bharara, who heads a team of 200 lawyers as US attorney for the prestigious South District of New York, is the first. Rajaratnam is being tried in Bharara’s jurisdiction, which includes the Wall Street.
The second is Sanjay Wadhwa, the deputy chief of Market Abuse Unit at the US Securities and Exchange Commission. He is a senior member of the enforcement team that’s investigated the Galleon case.
Bharara doesn’t speak to reporters and Wadhwa didn’t return calls.
The third person of Indian origin who could have a bearing on Rajaratnam’s fate could be former McKinsey chief Rajat Gupta, who was charged by SEC for insider trading last week. His lawyers have called the charges “baseless”.
The case has had other India connections. Two of the five people charged first with Rajaratnam were also of Indian origin: Anil Kumar of McKinsey and Rajiv Goel of Intel Capital. They too denied wrong-doing.
Rajaratnam, who ran the Galleon hedge fund, is accused of making $ 45 million trading stocks based on inside information. If convicted, the billionaire could spend 20 years in jail.
But he is said to be putting his wealth to good use, having spent $ 20 million already, and has gathered an impressive defence team led by John Dowd, who earlier uncovered a baseball betting racket and, in a different case, defended Senator John McCain.
The word is, Rajaratnam will take the stand himself.
Bharara might like that, but is unlikely to be impressed. The 40-year-old prosecutor’s team is handling many high profile cases including that of Ponzi scheme scamster Bernard Madoff and New York’s mafia bosses.
Preet’s full name is Preetinder Bharara and he is from Ferozepur in Punjab. His family moved to the US when he was an infant. He grew up in New Jersey, which has the most people of Indian origin in the US.
“Insider trading is extremely significant,” Bharara said in a speech in October, 2010. “It is theft and fraud and it is intolerable.” In trading circles people have begun calling him the Sheriff of Wall Street.
Wadhwa, the deputy leader of the market abuse unit of SEC’s enforcement department, is more of an unknown quantity. He did not respond to many calls and messages left on his answering machine.
In the Galleon case, Wadhwa and his team have used methods normally associated with criminal investigation – wiretaps, for instance, which will be presented in the trial.
The third Indian is on the other side of the law from Bharara and Wadhwa — Rajat Gupta, former McKinsey chief and a director in Goldman Sachs and P&G.
The SEC charged him last week with tipping off Rajaratnam about deals and results of the companies in which he was involved, which helped the Galleon chief make $18 million. Gupta has denied the charges.
In fact, his lawyers have said Gupta, founder of the prestigious Indian School of Business in Hyderabad, lost his entire $10 million investment in the GB Voyager Fund managed by Rajaratnam.
Does Gupta have a story to tell about Rajaratnam? He is due for an “administrative hearing” — opposed to a criminal trial for the Galleon chief — some time soon. There are no dates yet.