Ten good reasons to be glad Rajaratnam insider trading show over

By Susan Antilla

Raj Rajaratnam was found guilty of insider trading. Photo / AP
Raj Rajaratnam was found guilty of insider trading. Photo / AP

What a shock. Raj is guilty.

When you've got a trove of incriminating wiretaps and enough plea-copping associates of the defendant to populate a couple of baseball teams, it isn't a surprise that a New York jury would convict the billionaire co-founder of the hedge fund Galleon Group.

On Thursday, a jury said Raj Rajaratnam was guilty of 14 counts of conspiracy and securities fraud in an insider trading trial that lasted two months. He faces 15 to 19 years in prison when he is sentenced on July 29, though his potty-mouthed lawyer, John Dowd, said he intended to appeal.

So the Government got its bad guy. The co-operating witnesses are steering the Feds to more cheaters.

Hedge fund guys are dusting off their How To Pick Stocks Without Using Inside Information textbooks from their days in business school.

All in all, good news, I suppose, but the even better news is that the Rajaratnam show is over.

Ten reasons you should be glad:

10 We can all drop the pretence that we'd ever heard of Galleon. Come on, tell the truth. Unless you work in finance, had you ever heard of Rajaratnam or his New York-based fund? At least Ivan Boesky was famous for that outrageous "greed is healthy" speech.

9 Speaking of Boesky, be grateful for this: we've picked up another big insider-trading crook to add to our repertoire of white-collar-crime small talk for cocktail parties.

8 Bernie Madoff won't be the only big Wall St fish in the pokey. This will benefit society in many ways, not the least of which will be that reporters who didn't get a chance to land the initial jailhouse interviews with Madoff will have a shot at redeeming themselves with a tell-all session with Rajaratnam.

7 Rajaratnam's lawyer will have time for anger-management class. Dowd, 69, when a cameraman asked if he had anything to say, responded "Get the [f-bomb] out of here, that's what I've got for CNBC."

6 Rajaratnam could flee from house arrest at his apartment on New York's swanky Sutton Place, setting off a manhunt that might offer a lot more intrigue than the trial.

5 It will help the economy. Reporters will be booking flights, renting cars, and staying in hotels, as they tool around the country to visit prisons for the predictable stories about the amenities available at federal prisons, speculating over which one might turn out to be Rajaratnam's new home.

4 Wharton can add another case study of an alum gone bad when it teaches students how to know when they're shifting from ethical dilemma to flat-out criminality. Already, the school counts Michael Milken and two of Rajaratnam's college pals who pleaded guilty among its graduates.

3 Judge Richard J. Holwell, who presided over the trial, showed real promise for a lucrative new career in securities arbitration, where meetings are secret and documents are confidential.

2 Wall St brass can begin the healing process from the trial's big ego jolt. Only eight jurors had even heard of the billionaire defendant when the judge interviewed a room of 40 potential jurors. None had ever heard of Lloyd Blankfein, head of Goldman Sachs Group.

1 Best of all, maybe prosecutors will have time now to pursue all those less important criminals who almost destroyed the economy a couple years ago. Really, isn't it time that some big-bank bosses got the kind of voicemail from the feds that Rajaratnam did? "See you in court."

- BLOOMBERG

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