Raj Rajaratnam has broken his silence in an interview with Newsweek.
The disgraced billionaire, who headed the hedge fund Galleon Group, was convicted of insider trading earlier this month and received an 11-year prison sentence.
On Oct. 16, 2009, Rajaratnam was in Manhattan, planning a trip to London, where he was to open a $200 million fund for Sri Lankan, his native country. But before he left, the FBI raided his house and arrested him.
Take a good look at your son. You're not going to see him for a long time, FBI agent B.J. Kang told his family, according to Rajaratnam's account to Newsweek, and added, Your wife doesn't seem so upset. Because she's going to spend all your money.
After an eight hour interrogation, Rajaratnam remained uncooperative, refusing to wear a wire and tape a conversation with Raja Gupta, former CEO of McKinsey. He declined a guilty plea, which would have gotten him out of jail in less than five years. Unlike the around 50 people caught in the insider trading scheme, he alone is serving a long-term prison sentence.
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He explained that his decision to fight in court came from a belief in the American justice system, which, unlike the systems in South Asia, is supposedly unswayed by power and wealth.
There are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have, said Rajaratnam.
He studied in the prestigious Wharton School at the University of Pennsylvania, where he met Anil Kumar and Rajiv Goel, who would later testify against him after what Rajaratnam describes as pressure from the prosecutors.
At Wharton, the seeds for Galleon were planted among a group of South Asian groups. Wall Street, he said, was an unpopular destination for the ethnicity, because of the power of more entrenched groups. But he joined Chase Manhattan, and then startup Needham & Co., where he worked in computer chips. Then, he started a $15 million hedge fund with Needham, which grew to $250 million.
He founded Galleon in 1997, naming it after the European trading barges, starting with $300 million. By 2008, it had grown to 160 people and $7 billion, focusing on technology. But in 2007, former Galleon employee Roomy Khan began wiretapping conversations with Rajaratnam, which would ultimately lead to the federal investigation.