Monday, October 31, 2011

'Every bloody Indian cooperated.....'

Rajaratnam's bitter remark, given in a fascinating interview with Suketu Mehta (of Maximum City fame), will be remembered long after the present insider trading case concludes. Rajaratnam contrasts with his own sense of honour and loyalty with those of the Indians who were part of his group:
Anil Kumar’s son worked at Galleon one summer. I used to vacation with Rajiv Goel’s family. Their families knew my family. You don’t think this is going to haunt these guys? They wanted me to plea-bargain. They want to get Rajat. I am not going to do what people did to me. Rajat has four daughters.

 In the interview, Rajaratnam contrasts the American justice system with that of his native land:
In Sri Lanka I would have given the judge 50,000 rupees and he’d be sitting having dinner at my house. Here, I got my shot. The American justice system is by and large fair.
Also notable is his reference to ola leaf readers in Sri Lanka, one of whom pulled out his leaf and gave a recording to a friend of Raj's after Raj got into trouble.  Mehta describes what happened:

The astrologer chanted into a tape for 45 minutes. The recording said there was a government case against Raj, that he was in the stock business, that he was world-known. That he had to close his business down.
On now to the Rajat Gupta case. I read with disbelief news reports suggesting that Gupta could get up to 105 years in jail. America is notoriously tough on crime but 105 years for sharing confidential information or even for insider trading? Even 10 years would seem excessive. If I have understood the law incorrectly or  if there is something more serious involved, I am happy to be corrected.


Anonymous said...

One is also unlikely to see these comments in a mainstream Indian newspaper. Why is that so?

Anonymous said...

It could be that the law enforcement agencies are going to try a lot of different counts and hope to get him on atleast some. I remember that Raj was supposed to be tried on 40 counts and finally was found guilty on 14. Or, it could be a time wasting or overwhelming the defense and jury type tactic. Since, it seems that the prosecution may have a tough case mostly because Rajat did not directly profit on the insider trades.

Dheeraj Sanghi said...

He has 6 charges against him - five charges of committing a fraud and one charge of conspiracy. Each act of fraud, if proved, can result in up to 20 years of prison, and the conspiracy charge can lead to 5 years of prison. That is how it totals up to 105 years.

In general, even if all 6 charges are proved, the judge may give "concurrent" punishment, which means that the total punishment is 20 years and not 105 years. (Normally, serial punishment is given for crimes like serial murders. For economic offenses, one usually gets concurrent punishment.)

Second, 20 years is the maximum as per law. The maximum punishment for insider trading ever given in US is 11 years (to Rajaratman recently).

So, even if all 6 charges are proved, the chances are that all 6 punishments will run concurrently, and the maximum of them would be of the order of 10 years.