The Work

October 17, 2009 8:30 AM

Insider Trading Defendants, Wasting Little Time, Lawyer Up

Posted by Brian Baxter

UPDATE: Oct. 26, 5:24 p.m. Raj Rajaratnam has dropped Gibson, Dunn in favor of counsel at Akin Gump. Oct. 29, 6:56 p.m. Intel's Goel is now being represented by David Zornow of Skadden, Arps.

Federal prosecutors in Manhattan charged six individuals, including hedge fund billionaire Raj Rajaratnam, with insider trading on Friday. (Rajaratnam posted a $100 million bond and was ordered to remain within 110 miles of New York City, Reuters reports.)

The securities and commodities fraud task force is supervising the matter--reportedly the largest hedge fund insider-trading scheme ever uncovered. Prosecutors and the SEC have accused the individuals of earning more than $25 million from illegal trading over three years in companies like Akamai, Google, and Hilton Hotels, The New York Times reports.

Rajaratnam's name also allegedly turned up in a separate federal probe into the U.S. fund-raising activities of the Tamil Tigers, a separatist Sri Lankan terrorist group, reports The Wall Street Journal. Federal prosecutors in Brooklyn secured guilty pleas from four individuals in that investigation in June, although The Times of India reports that Rajaratnam, of Sri Lankan heritage, might not necessarily have known that donations he made to a charity were being funneled to the Tigers.

Assistant U.S. attorneys Josh Klein and Jonathan Streeter and special assistant U.S. attorney Andrew Michaelson are prosecuting the insider trading case.

The Am Law Daily has learned that the following defense lawyers have been retained:

1. Jim Walden, cochair of the white-collar defense practice at Gibson, Dunn & Crutcher (once on the short list for the top post at the U.S. attorney’s office for the Eastern District of New York), is representing Raj Rajaratnam, 53, a partner and portfolio manager at Galleon Group.

2. Manuel Araujo, a federal public defender in California, represented Rajiv Goel, 51, director of strategic investments at Intel Capital, at a court appearance on Friday in San Jose.

3. Charles Clayman and Isabelle Kirshner from New York’s Clayman & Rosenberg are representing Anil Kumar, 51, a director at McKinsey & Co., Inc.

4. Kerry Lawrence of Briccetti, Calhoun & Lawrence (a former assistant U.S. attorney who once served as deputy assistant-in-charge of the branch office in White Plains, N.Y.), is representing Robert Moffat, Jr., 53, a senior vice president and group executive at IBM's systems and technology group.

5. Lawrence Iason of Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer is representing Mark Kurland, 60, president and general partner at New Castle, the former equity hedge fund group of Bear Stearns Asset Management.

6. Alan Kaufman of Kelley Drye & Warren (former chief of the criminal division at the U.S. attorney’s office in Manhattan) is representing Danielle Chiesi, 43, an employee at New Castle.

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Nice. Here I am, a law abiding, ethical person trying to ascertain executive employment in a down economy, and these clowns are conducting white collar crime. For those of you not working, this one is for you.

As always the greedy elite think the rules and law do not apply to them. They never have enough and have a sense of entitlement to steal from and cheat the public and honest investors.

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