Sunken Galleon

Another fabled New York hedge fund investor has hit the skids, this time charged with insider trading. Billionaire founder of The Galleon Group, Raj Rajaratnam was arrested recently and charged with inside trading in such stocks as Hilton, Clearwire, Polycom, and Google. Rajaratnam was tipped off that a contact had been wearing a wire and was carrying a ticket to Switzerland for a few days later when arrested. Supposedly he made more than $20 million in profit from 2006 to 2009. His fund, Galleon, was rumored to be a pressure cooker, with long hours and highly detailed research reports. Born in Sri Lanka, Rajaratnam became a technology analyst at Needham, eventually becoming president. Several others were also arrested and their firms, including Galleon, quickly expressed shock, promised cooperation, and distanced themselves from their errant employees. There are a lot of possibilities here and we would be the last to make excuses for crooks, but we are always confounded when people worth billions risk it all for a little bit more. We had that reaction when Michael Milken supposedly inside traded for an extra hundred thou, when Drexel was paying him half a billion a year, and this seems similar. Either people are really really really greedy or the government overstates the intent of the accused and its case. We suspect maybe a bit of both.
-- Paul Marotta