Tag Archive | "insider-trading"

How To Destroy Evidence Of Insider Trading: Lesson 3

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If you’ve been closely following the government’s Insider Trading Fest(ivus) 2010/2011 you know that one thing that’s emerged is a detailed guide to how one should go about destroyed evidence of securities violations that a jury would not look upon kindly. Garrett Bauer spoke to us at length about the benefits of washing versus burning dirty money while Donald Longueuil, the foremost expert on the matter, provided a step-by-step guide to getting rid of incriminating USB drives (you’ll need: two pairs of pliers, four plastic baggies, one North Face fleece). Yesterday, an (alleged) accomplice of (accused) insider trader/former Galleon employee Zvi Goffer added a chapter on getting rid of a cell phone that could cause trouble.

Santarlas, testifying under a cooperation agreement with the government, said he and another former Ropes & Gray attorney, Arthur Cutillo, told Brooklyn, New York, lawyer Jason Goldfarb in 2007 about acquisitions involving 3Com Corp. and Axcan Pharma Inc. He said Goldfarb gave him $25,000 for the 3Com information and $7,500 for Axcan.

“When I received the cash, Jason had told me to dispose of the phone — break it in half, submerge it in water and put it in a garbage can,” Santarlas testified.

[Bloomberg]

Earlier: If You’ve Ever Wondered What Donald Longueuil Might’ve Sounded Like On The Cold December Night He Told A Colleague How To Destroy Evidence Of Insider Trading, Wonder No Longer (MP3)



Article courtesy of Dealbreaker

How To Destroy Evidence Of Insider Trading: Lesson 3

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If you’ve been closely following the government’s Insider Trading Fest(ivus) 2010/2011 you know that one thing that’s emerged is a detailed guide to how one should go about destroyed evidence of securities violations that a jury would not look upon kindly. Garrett Bauer spoke to us at length about the benefits of washing versus burning dirty money while Donald Longueuil, the foremost expert on the matter, provided a step-by-step guide to getting rid of incriminating USB drives (you’ll need: two pairs of pliers, four plastic baggies, one North Face fleece). Yesterday, an (alleged) accomplice of (accused) insider trader/former Galleon employee Zvi Goffer added a chapter on getting rid of a cell phone that could cause trouble.

Santarlas, testifying under a cooperation agreement with the government, said he and another former Ropes & Gray attorney, Arthur Cutillo, told Brooklyn, New York, lawyer Jason Goldfarb in 2007 about acquisitions involving 3Com Corp. and Axcan Pharma Inc. He said Goldfarb gave him $25,000 for the 3Com information and $7,500 for Axcan.

“When I received the cash, Jason had told me to dispose of the phone — break it in half, submerge it in water and put it in a garbage can,” Santarlas testified.

[Bloomberg]

Earlier: If You’ve Ever Wondered What Donald Longueuil Might’ve Sounded Like On The Cold December Night He Told A Colleague How To Destroy Evidence Of Insider Trading, Wonder No Longer (MP3)



Article courtesy of Dealbreaker

Hey, Raj Rajaratnam’s Lawyer, Do You Have A Comment For CNBC?

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Yes he does! “Get the fuck out of here. That’s what I’ve got for CNBC.”



Article courtesy of Dealbreaker

Raj Rajaratnam’s High-Priced Legal Team Pleased With Thrilling 23-14 Victory

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“We started out with 37 stocks, we’re down to 14,” defense attorney John Dowd said today after his client was found guilty on 9 counts of insider trading and 5 counts of conspiracy. “The score is 23 to 14 for the defense. We’ll see you in the Second Circuit.”

[Bloomberg]



Article courtesy of Dealbreaker

Raj Rajaratnam Found Guilty

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On all 14 counts (9 counts of insider trading, 5 of conspiracy). Raj-Raj now faces up to 25 years in prison.

While we wait for the sentencing, wondering what took the jury so long (12 days) to come to a decision? They just didn’t want camp to come to an end.

Jurors in the Raj Rajaratnam insider-trading trial ended their 11th day of deliberations yesterday without a verdict — but with some picturesque mementos of their time together. After court ended, five jurors — including a New York City school teacher, a nurse and a graphic designer for Apple Inc. — sat in front of the fountain in Foley Square, near the Manhattan federal court where they’ve been deliberating for three weeks, and took turns snapping group photos.

With smiles aplenty, they looked like a group that really got along. While they may not have forged a consensus on the 14-count indictment, they seemed to have forged a friendship.

[NYP]



Article courtesy of Dealbreaker

Raj Rajaratnam Jury Reaches A Verdict

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We’ll apparently find out what that is at 10:40. In the meantime: consider this your last chance to vote:

a. guilty on all counts
b. guilty on some counts
c. innocent



Article courtesy of Dealbreaker

Prosecutors Looking Into Steve Cohen’s Book O’ Trades

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Last February two former SAC Capital employees, Noah Freeman and Donald Longueuil, were charged with insider trading, with Longueuil pleading guilty in April and Freeman doing so from the get-go, having chosen to cooperate with the FBI (cooperation that included wearing a wire while having conversations with his ex-best friend, Longueuil, in which he got Don to vividly describe destroying evidence with two pairs of pliers and a North Face fleece). At the time of the accusations, SAC said that they were “outraged” by the actions of the duo, who’d been fired in 2010 for “poor performance.” That should have been the end of it, but now the Feds are taking a look-see at whether or not these punks got their stink on The Cohen Account AKA The Big Book.

The Big Book would be the $3 billion portfolio overseen by the Big Guy (described as The Cohen Account in court filings), where many of the trades come from “high-conviction” ideas suggested by portfolio managers to SC, successful ones earning them a few extra zeros at the end of the year and/or a brand new all-fleece wardrobe. According to the Journal, prosecutors are checking out the suggestions made by Longueuil and Freeman to Cohen (which a) may have been legitimate ideas they came up with on their own, sans material non-public info or b) based on tainted info that SC didn’t know was dirty), among other things.

The filings don’t say that the trades suggested by Messrs. Freeman and Longueuil were based on inside information, nor that Mr. Cohen had any knowledge of the portfolio managers’ rationale for recommending the trades. The documents filed in court don’t include specific details about the trades or the timing of them.

The SAC documents under scrutiny by the government were referenced in communications between the Manhattan U.S. Attorney’s office and lawyers for Mr. Longueuil and a co-defendant, in which prosecutors described evidence they were turning over in the case. The defense lawyers attached the prosecutors’ letters to filings in a New York federal court last month, before Mr. Longueuil pleaded guilty.

The court filings indicate that prosecutors are examining the compensation SAC paid to Messrs. Freeman and Longueuil. Among documents gathered by prosecutors are the two fund managers’ pay stubs and tax forms, as well as information on SAC’s net rate of return, management fees and incentive fees, according to the filings.

Neither Cohen nor SAC have been accused of any wrongdoing and it sounds as though prosecutors haven’t uncovered anything beyond the fact that these two guys once worked there and occasionally came in contact with Steve. Longueuil and Freeman are nevertheless advised to get out of town** and certainly not consider asking for Mets season tickets,*** or even entertaining the thought of putting SC down as a job reference.

US Examining Trades By Hedge Fund Titan [WSJ]

**Actually, maybe think about the protection that comes with jail time.
***The only seat you’ll have in that stadium is 5 feet underneath second base.



Article courtesy of Dealbreaker

Rajaratnam Jury Still Hasn’t Decided Guilt Or Innocence, Raj’s Foot Still Hurts

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The Raj Rajaratnam jury has moved onto Day 7 of its deliberations re: whether or not Raj is guilty on 5 counts of conspiracy and 9 counts of securities fraud. Meanwhile, the Galleon founder is on Day 3 or 4 of bed rest and reruns, following emergency surgery over the weekend to treat a “bacterial infection” on his foot.



Article courtesy of Dealbreaker

Raj Rajaratnam’s Handlers Think Articles About Alleged Insider Trading Make Him Sound Bad Because Reporters Are Trying To Get In Good With The…

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Keeping watch over the 20 or so journalists reporting on Rajaratnam’s trial is Jim McCarthy, who handles the defendant’s media relations. McCarthy, the founder of New York-based CounterPoint Strategies LLC, isn’t shy about his views of the coverage. “Some of the coverage has been” — he paused for five seconds as he considered his words — “distorted and irresponsible,” McCarthy said in an interview yesterday. He’s particularly critical of some reporters and news organizations who he claims “have been slanting their coverage” in hopes of “gaining favor with the government,” he said. [Bloomberg]



Article courtesy of Dealbreaker

What Does Raj Rajaratnam’s Lunch Order Say About Him

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As you may know, we’re on Day 2 of jury deliberations in the Raj Rajaratnam insider trading case. The Galleon Group founder has been charged with 14 counts of securities fraud and conspiracy and faces up to 20 years in prison. Rajaratnam (and his 7-man legal team) have been in court waiting for the verdict but not saying much or indicating whether or not he’s confident he’ll get off, or scared out of his mind. Or is he? Despite not speaking to reporters or gesturing with his hands, Raj has been giving some clues, if we can crack them. Today, they came in the form of a sandwich.

According to the Journal‘s senior sandwich correspondent, Rajaratnam and his lawyers “headed to the courthouse cafeteria for lunch, [where] he defendant ordered a tuna sandwich with mayonnaise.” Obviously there’s meaning behind this choice of tuna with extra mayo, but what? Can we infer that:

a) Raj is worried he’s going to go away for a long time and wants to get all the mayo– his favorite condiment- that he can and then some in the meantime

b) He thinks the tuna in the courthouse cafeteria sucks and he’s trying to hide the taste

c) All the self-help books he’s been reading suggest trying one new thing every day, and never having ordered tuna before, doesn’t know the mayo is usually implied?

d) He’s confident he’ll get off and last night, in anticipation of beach season, tried on all his favorite swimsuits only to find that the recent weight-loss has left them entirely too baggy. He’s now doing what he can to get his curves back before Memorial Day



Article courtesy of Dealbreaker