Raj Rajaratnam, the hedge fund tycoon and Galleon Group co-founder at the center of a nationwide insider-trading crackdown, was found guilty of all 14 counts against him in the largest illegal stock-tipping case in a generation.
A jury of eight women and four men in Manhattan returned its verdict Wednesday after hearing evidence that Mr. Rajaratnam engaged in a seven-year conspiracy to trade on illegal tips from corporate executives, bankers, consultants, traders and directors of public companies including Goldman Sachs Group (GS). He gained $63.8 million, prosecutors said.
Mr. Rajaratnam was convicted on five counts of conspiracy and nine counts of securities fraud. Conspiracy carries a maximum sentence of five years; securities fraud can bring 20 years in prison.
A related insider case against former Galleon trader Zvi Goffer is scheduled for trial this month.
Galleon was among the 10 largest hedge funds in the world in the early years of the last decade. It managed $7 billion at its peak in 2008.
Jurors heard more than 40 recordings of Mr. Rajaratnam, in some of which he can be heard gathering secrets from his sources.
Mr. Rajaratnam used inside information to trade ahead of public announcements about earnings, forecasts, mergers and spinoffs involving more than a dozen companies, including Intel, Goldman Sachs and Google, according to the evidence at the trial.
Prosecutors said Mr. Rajaratnam's sources included Rajat Gupta, who until last year was a director at Goldman Sachs, and Kamal Ahmed, a Morgan Stanley (MS) investment banker. Both deny wrongdoing, and neither has been criminally charged.