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Showing posts from March, 2011

Insider Trading Roundup: Wall Street on Trial

This week marks the start of the criminal trial against Galleon Group LLC co-founder Raj Rajaratnam in federal court in Manhattan. Rajaratnam is the central figure in the largest crackdown on hedge-fund insider trading in U.S. history. He is accused of making $45 million from confidential information leaked by corporate insiders and hedge fund traders. He faces up 20 years in prison if convicted of securities fraud. Rajaratnam has denied wrongdoing and has argued that investment advisers routinely speak to company insiders as they do research. The anticipated 10-week trial will determine whether his conversations (many, recorded) and subsequent trades were illegal or not.

Since the indictment of the Galleon case in 2009, the Justice Department and the SEC have brought insider trading cases against numerous hedge fund managers, consultants, bankers, lawyers, and individuals at “expert network” firms.

Just last week, the SEC filed a civil action against Rajat Gupta, a former Goldman Sac…

Court Reverses Decision on Cold Stone Creamery Caller

The State of California Court of Appeals has reversed a decision by the trial court in the case People v. Powers. The original decision in January 2009 charged David Thomas Powers with one felony count of criminal threats against a Cold Stone Creamery employee along with several misdemeanor charges of making annoying calls to an employee. The court, at first, found Powers incompetent for trial at the time and ordered him to be committed to a state hospital. Following treatment, the court dropped the felony charges against Powers and the case was continued in a trial court, whereupon Powers testified on his own behalf. The trial court found Powers guilty of four misdemeanors.

In the fall of 2008, David Thomas Powers left recorded messages after calling Cold Stone Creamery regarding his complaints and discontent with the service and other customers in the store. Powers claimed that he was being “ripped off” and continued to use profanity throughout the several messages he left after he …