Billionaire investor Raj Rajaratnam, founder of Galleon Group was arrested on Friday in an alleged $20 million insider trading scheme that US prosecutors called the biggest ever involving hedge funds.
Galleon Group said in a statement it is shocked by the arrest of Raj Rajaratnam and had no knowledge of the investigation before today, according to CNBC report.
The alleged scheme, which ran from 2006 until earlier this year, involved trades in companies including Google, IBM, Sun Microsystems and Hilton and produced profits of more than $20m, most of which went to Mr. Rajaratnam, federal prosecutors said.
“The defendants operated in a world of, you scratch my back, I’ll scratch your back,” U.S. Attorney Preet Bharara in Manhattan said at a press conference today.
Prosecutors also arrested Rajiv Goel, who worked at Intel Capital as a director in strategic investments, Anil Kumar, who worked as a director at McKinsey & Co., and IBM Corp. executive Robert Moffat and the former officials at Bear Stearns Asset Management Danielle Chiesi and Mark Kurland.
Mr Rajaratnam, named this year as the 236th richest American by Forbes, was due to fly to London yesterday, according to court documents, with a return flight to New York from Geneva scheduled for October 22.