prison

Last August, a report came out claiming that Raj Rajaratnam was having the time of his life in prison. As someone who went to great lengths to avoid going to jail (not so much by staying on the right side of securities laws but by paying a high-priced lawyer to accuse people churning out supposedly slanted coverage of his client of “sucking [U.S. Attorney for the Southern District of New York] Preet Barhara’s teat“), this revelation came as a surprise. As a hedge fund billionaire who’d grown used to a luxurious lot in which he paid many people to keep him comfortable and content, there was an expectation that life on the inside would come as a rude awakening. And, yet, the report claimed that Raj was “reigning like a king,” “doing his time in the lap of luxury compared to other inmates,” with a set-up that included:

  • A private toilet
  • A shared balcony
  • An adjustable bed
  • “A very delightful guy doing all sorts of stuff for him– sort of like a ‘manservant’”
  • An inmate who cooks for him using a microwave when he “doesn’t want to hoof it to the dining hall”

Unfortunately for anyone anticipating doing time on the inside, all of these perks apparently come at a cost, according to a guy who claims Raj had to pay a number people off to arrange the manservant and en-suite, among other things. Read more »

Remember the group of old high school buddies, who put Colonia High Class of ’88 on the map when they were criminally and civilly prosecuted for an “insider trading scheme focused on pharmaceutical and medical technology stocks”? They’ve all received punishments that range from fines to prison time and that’s in spite of the fact that:

  • The phrase “I have some vacation pictures for you” was a cover for payments made to tippers
  • Deals were referred to in code as the “Fat Man,” while updates on the statuses of deals were communicated with lines like “fat man has a friend” and “fat man walks alone”
  • One of the men assured everyone that even if the Securities and Exchange Commission did catch on, they wouldn’t have the resources to do anything about it. (To wit: “The SEC’s got to pick their battle because they have a limited number of people and huge numbers of investors to go after.”

And yet! Read more »

  • 17 Jun 2014 at 3:23 PM

Civil Penalty Watch ’14: Rajat Gupta

Ex-Goldman Sachs board member Rajat Gupta reported to prison earlier today for, among other things, being unable to wait more than 23 seconds to spill material non-public information to now-known insider trader Raj Rajaratnam. Also, he needs to come up with about $24.9 million, if anyone’s feeling generous. Read more »

Five former aides to Bernard Madoff who spent decades working for his firm were found guilty of helping run the biggest Ponzi scheme in U.S. history, a $17.5 billion fraud exposed by the 2008 financial crisis. The three men and two women, hired by Madoff with little financial experience, were convicted on all counts. The defendants failed to persuade a federal jury in Manhattan they were ignorant of the fraud despite being part of the inner circle at his New York-based firm…The defendants are Annette Bongiorno, who ran the investment advisory unit at the center of the fraud; Joann Crupi, who managed large accounts; Daniel Bonventre, the ex-operations chief of Madoff’s broker-dealer; and computer programmers George Perez and Jerome O’Hara, accused of automating the scam as it grew rapidly in the 1990s. [Bloomberg]

  • 18 Dec 2013 at 5:57 PM

SAC’s Steinberg Is Going To Prison

This probably does not come as any more of a surprise to him than it does to anybody else, given (a) that prosecutors are batting 1.000 on insider-trading cases these days, and (b) that he passed out as soon as he saw the jury walk into the courtroom. Read more »

For one Maine couple, the allure of James Philbrook’s pitch proved too irresistible. In fairness to Philbrook, the money the scam generated in part went to paying off the debts of a buddy’s kid who also struggled with staying on the right side of the law. As for the selection of Electra, one can hardly quibble with a line of thinking that went “I saw this hot young thing on a TV Guide in the mid-1990s.” Read more »

If various sources are to be believed, Raj Rajaratnam is having the time of his life in prison, where he’s “reigning like a king,” “has a very delightful guy doing all sorts of stuff for him — sort of like a ‘manservant’,” enjoys a private en suite, balcony, and adjustable bed, and gets along smashingly with his fellow inmates, who can’t help but notice how downright svelte he’s become. All that’s a good thing, as we’ve just received word he won’t be leaving any time soon. Read more »