Consider Galleon Group’s Raj Rajaratnam who was arrested in October 2009
and charged with four counts of conspiracy and eight counts of securities
fraud.
In 2000, Raj Rajaratnam and then partner Krishen Sud made the highest earners list on Wall Street.
Once described as one of American’s “superstar” fund managers Rajaratnam was featured
among the elite US money managers in Lois Peltz authored book entitled “The New Investment Superstars:
13 Great Investors and Their Strategies for Superior Returns.”
The 2001 Check Fund Manager report on Galleon detailed a dispute between Raj Rajaratnam and
former partner Krishen Sud.
Rajaratnam filed a $1 billion dollar lawsuit against Mr. Sud, claiming that when Sud left
the company he took investor lists and broker contacts with him. He also claims that Sud
hired away several employees from Galleon in order to start a new company, Argus Partners.
Check Fund Manager investigated Galleon Group & Raj Rajaratnam on thirteen different occaisions
going back to 2001. We warned our clients about the SEC investigation into the
Galleon Group in July 2008, more than a year before it was made public by his arrest. The civil litigation summary
section of the CFM report is laden with lawsuits and past regulatory fines involving Rajaratnam and Galleon.
Just a heads up, I’ve been reading a lot of articles in Google News lately on hedge funds and have noticed many familiar manager names popping up. There are a lot of new articles coming out saying that a manager is either a.) not doing well b.) doing well or c.) commenting on the market turmoil.
I’m guessing that people in the fund of funds industry (our clients) are also reading the media too and are more likely to know if you omitted a recent media article in a report. To combat this, I’ve started doing a Google News search on top of the standard Google search. This seems to check for the most recently published articles.
With the influx of updates, they are probably looking for just this kind of information.
I had a report recently where we went to confirm employment. When searching for company contact information, I realized that my subject had worked at two of the same companies at the same time as a fraudster. The fraudster had worked at one company, then went on to found his own firm in the 1980s. In the early 1980s, he was indicted. At the time he was out of the country and never came back.
There was no connection to my subject, other than they worked at the same seemingly small company, and then my subject went on to work at the company that the fraudster had started. He also appears to have worked at this company during the time that the fraudster committed the crimes that the US Govt accused him of.
I had a hard time deciding how to report that information. Ultimately I decided that the best thing to do was to provide details on the criminal activity and simply report that my subject had worked at the same companies during the same time as the fraudster.
