NEW YORK - A former Wall Street titan was convicted Wednesday of making a fortune by coaxing a crew of corporate tipsters to give him an illegal edge on blockbuster trades in technology and other stocks - what prosecutors called the largest insider trading case ever involving hedge funds.
Sri Lanka-born Raj Rajaratnam, 53, was convicted of five conspiracy counts and nine securities fraud charges in federal court in Manhattan.
Prosecutors had alleged Rajaratnam made profits and avoided losses totaling more than $60 million from illegal tips. His Galleon Group funds, they said, became a multibillion-dollar success at the expense of ordinary stock investors who didn't have advance notice of the earnings of public companies and of mergers and acquisitions.
On Wednesday, Rajaratnam sat at the defense table, a rarity for trial, and stayed motionless as the verdict was read. He will remain free on bail, though now with electronic monitoring, at least until his July 29 sentencing.
The verdict came after seven weeks of testimony showcasing wiretaps of Rajaratnam wheeling and dealing behind the scenes with corrupt executives and consultants. Some of the people on the other end of the line pleaded guilty and agreed to take the witness stand against him.
Authorities said the 45 tapes used in the case represented the most extensive use to date of wiretaps - common in organized crimes and drug cases - in a white-collar case.
"You heard the defendant commit his crimes time and time again in his own words," Assistant U.S. Attorney Reed Brodsky said in closing arguments. "The tapes show he didn't believe the rules applied to him."
The wiretaps appeared to play prominently in the jurors' deliberations: They asked to return to the courtroom countless times so they could listen to them again.
The defense argued that the tapes revealed nothing more than that Rajaratnam was doing his duty by asking questions about information already circulating in the "real world" of high finance. "That happens every day on Wall Street," he said.