Rajaratnam insider trading verdict: guilty

Hedge fund founder Raj Rajaratnam was found guilty in a Manhattan federal court Wednesday of all 14 counts of insider trading.

Rajaratnam, the central figure in the broadest insider trading investigation in decades, sat expressionless as the judge's deputy read the jury's verdict to a hushed courtroom.

The Galleon Group founder could face at least 15 years in prison when he is sentenced on July 29.

Yesterday's verdict, which many experts predicted given evidence from dozens of secretly recorded telephone calls, was a vindication of the prosecution case that Rajaratnam ran a web of highly placed insiders between 2003 and March 2009 to leak corporate secrets. He earned an illicit $63.8 million as a result, the government argued.

"It's an historic verdict. It's a dramatic verdict," said Bill Singer, securities lawyer with Gusrae, Kaplan, Bruno & Nusbaum. "It will likely set the stage for a dramatic change not only in the way that the Wall Street insider-trader activities are investigated and prosecuted, but most likely this will have a chilling effect on individuals and companies that trade."

The tipsters included executives at major blue chip companies such as Intel Corp, and Rajat Gupta, who was once head of elite management consultancy McKinsey & Co. and a former Goldman Sachs Group Inc board member.

Under federal sentencing rules that are not binding on the judge, Rajaratnam faces between 151/2 years and 191/2 years in prison, prosecutors said.

Chief defense lawyer John Dowd said Rajaratnam, 53, will appeal the case.