Instant View: Rajaratnam found guilty of insider trading

Reuters

Hedge fund manager Raj Rajaratnam was found guilty on 9 counts of securities fraud and five counts of conspiracy.

The jury delivered a unanimous verdict on its 12th day of deliberations after a two-month-long trial.

Continue Reading Below

COMMENTS

BILL SINGER, SECURITIES LAWYER WITH GUSRAE, KAPLAN, BRUNO & NUSBAUM

"It's an historic verdict. It's a dramatic verdict. And it will likely set the stage for a dramatic change not only in the way that the Wall Street insider-trader activities are investigated and prosecuted, but most likely this will have a chilling effect on individuals and companies that trade on Wall Street.

"Very few lawyers that do this for a living would we have expected a clean sweep.

"It will justify Preet Bharara to call for more wire taps that will then be issued by the courts quicker. Wall Street has in essence been put on notice that prosecutors are going to be baiting more hooks, trying to pull more fish out of the water and have more success doing that.

"This was a case that the prosecution really needed to win to retain its credibility.

"In Rajaratnam, we have individuals in board rooms of publicly traded companies. As such, the public is put on warning that the securities markets are fixed and rigged."

JON NAJARIAN, FOUNDER OF WEB INFORMATION SITE OPTIONMONSTER.COM, CHICAGO

"I think it was an appropriate verdict. I guess through some high-profile cases, not in securities but mainly in other criminal activities, like for instance, the OJ trial, people have thought that obvious guilt will be overlooked by some juries. This was not the case this time. The jury did a good job. I haven't seen any move in volatility and the market. Had it not come out this way, then given how obvious it seemed to most of us that the guy was guilty, there could have been extreme negative reaction in the market."

MATT MCCORMICK, PORTFOLIO MANAGER AT BAHL & GAYNOR INVESTMENT COUNSEL IN CINCINNATI, WHICH HAS ABOUT $3.6 BILLION OF ASSETS UNDER MANAGEMENT

"Most people anticipated this. It looks like it was a pretty clear-cut decision. If they've got wiretaps on you, they've got you. Look at the implications of this: expert networking and other grey areas of research will be called into question. People will be much more careful.

"There is such a thing as doing real gumshoe work and using the mosaic theory, and then there's information-gathering that's more nefarious. This verdict will force people to take that extra step to make sure they are in the clear."

MICHAEL KOBLENZ, FORMER FEDERAL PROSECUTOR, WHITE-COLLAR DEFENSE LAWYER AT MOUND COTTON WOLLAN & GREENGRASS

"When that many people pleaded guilty in advance, I'm surprised it went to trial. I'm surprised they didn't try to work out a deal. But if you've got the money and you want to take a shot, maybe it was worth it to him.

"I'm sure his lawyer said, 'You can spend this much on a defense and see what happens, and if you don't win, then maybe you'll win on appeal.' Maybe they'll get a reversal, but I have no idea.

"Millions of dollars were spent on this case, no question about it. But I guess he took a shot. It will be interesting to see what the sentencing will be."

DAN RICHMAN, PROFESSOR AT COLUMBIA LAW SCHOOL

"The combination of this conviction with the numerous guilty pleas in the case suggest ... the seriousness with which the government will be pursuing insider trading.

"Where you have tapes and extensive testimony of the sort you had in this trial, a responsible jury will review them."

(Reporting by Terry Baynes, Angela Moon, Dan Wilchins, Lauren LaCapra and Nick Brown)