The Galleon Case

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“Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power” (P. J. O’Rourke). The Galleon Group is precisely a story emanating a few members lust for power that was consumed by the essence of greed. Founded by Raj Rajaratnam and fellow partners in 1997, the Galleon Group quickly emerged to substantial wealth and incredible success as one of the largest hedge fund management firms in the world. Managing over seven – billion dollars in a series of funds that specialized in the healthcare and technology industries, the New York headquartered firm was on the fast track to stardom. Unfortunately, the firm became the center of a catastrophic insider trading scandal in 2009 which ultimately saw the demise of the firm as well as the apprehension of several avaricious individuals. The Securities Exchange Act of 1934 oversees the regulation and registration of securities exchanges, brokers, dealers, and national securities associations. Furthermore, the act authorizes the Securities and Exchange Commission (SEC) to engage in market inspection to hinder practices such as fraud, market manipulation and misrepresentation. In addition, Section 10(b) and SEC Rule 10b – 5 concerns the area most associated with this particular case known as insider trading. Both legal and illegal, insider trading transpires when individuals obtain “inside information” about the strategy of a publicly listed corporation and then buys and sells securities based on the premise of this knowledge. Legally, corporate insiders are at liberty to buy and sell stock within their own compan... ... middle of paper ... ....com. Bloomberg, 11 May 2011. Web. 01 Mar. 2014. Hurtado, Patricia. "Kumar Gets Probation for His Galleon Trial Cooperation."Bloomberg.com. Bloomberg, 20 July 2012. Web. 01 Mar. 2014. Miller, Roger, and Frank Cross. The Legal Environment of Business. Mason, OH: South Western, 2011. Print. O'Rourke, P. J. "Greed Quotes." BrainyQuote. Xplore, n.d. Web. 27 Feb. 2014. Protess, Ben. "Chiesi Sentenced to 30 Months in Galleon Case." DealBook Chiesi Sentenced to 30 Months in Galleon Case Comments. The New York Times, 20 July 2011. Web. 01 Mar. 2014. Rothfeld, Michael. "Gupta Gets Two Years for Leaking Inside Tips." The Wall Street Journal. Dow Jones & Company, 25 Oct. 2012. Web. 29 Mar. 2014. "Ship of Knaves." The Economist. The Economist Newspaper, 01 June 2013. Web. 01 Mar. 2014. Sumner, William Graham. "Greed Quotes." BrainyQuote. Xplore, n.d. Web. 27 Feb. 2014.

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