Hedge Fund Manager Indicted In Trading Case

A federal grand jury has indicted the billionaire founder of the Galleon Group hedge fund and charged him with taking part in a vast insider trading network. Prosecutors say the network made millions of dollars — mostly by illegally trading in technology stocks.

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RENEE MONTAGNE, host:

And a federal grand jury has indicted the billionaire founder of the Galleon Group hedge fund. He's been charged with taking part in a vast insider trading network. Prosecutors say the network made millions of dollars - mostly by illegally trading in technology stocks.

NPR's Jim Zarroli reports.

JIM ZARROLI: The 17-count indictment names Raj Rajaratnam and Danielle Chiesi. The two are the first people to be criminally indicted in the case. Prosecutors say Chiesi obtained inside information from Akamai Technologies and then passed it on to Rajaratnam.

The two also allegedly acquired insider information about a number of other technology giants including Sun MicroSystems and AMD.

Prosecutors are said to have used wire taps to collect evidence and are relying on the testimony of a former Intel employee who says she passed on information to Rajaratnam.

Prosecutors say the network involved more than 20 people, most of them involved with technology stocks. So far, six people have pleaded guilty to being involved in the case and are likely to cooperate with the government. Four other people are expected to face criminal indictments. They include a former senior vice president at IBM and a former senior partner at the management consulting firm McKinsey.

Rajaratnam's lawyer issued a statement saying he is innocent and looks forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence.

Jim Zarroli, NPR News, New York.

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