New York (HedgeCo.net) – Hedge fund manager Raj Rajaratnam won approval yesterday from U.S. District Court Judge Richard Holwell to stay free on $100 million bail while awaiting trial on his insider trading case. The judge refused to reduce or revoke bail.
Rajaratnam’s lawyer attacked the U.S. government’s wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid.
“The recordings were cherry picked and mismanaged and someone did not do their homework,” Rajaratnam’s lawyer told the Judge, according to reports.
Last week Federal prosecutors doubled the sum of the allegations and former senior partner at McKinsey & Co., Anil Kumar, pleaded guilty to conspiracy, insider trading and securities fraud.
A hedge fund manager known as “Tipper X”, and hedge fund consultant Roomy Khan are cooperating with investigators in providing evidence against Rajaratnam.
“Tipper X” was identified as Thomas Hardin, a former trader at Lanexa Global Management, the Wall Street Journal reported, citing people familiar with the investigation. His cooperation may widen the case and involve more hedge funds, the newspaper said. Ian Murray, a New York hedge fund manager who has not been charged with wrongdoing, and Gustavo D’Souza, whose connection to the case is unclear, also appear on the list of potential government witnesses.
Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme.
The insider trading case involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp. Danielle Chiesi, an executive at New Castle Funds LLC was also indicted on multiple counts of conspiracy and securities fraud.
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