Hedge Fund Investigation - WAOW - Newsline 9, Wausau News, Weather, Sports

Hedge Fund Investigation


By Melissa Langbehn - bio | email | Twitter | Facebook &

NEW YORK (AP) -- Prosecutors have played a tape of a 2008 conference call that they say depicts a New York City hedge fund manager bragging about making a massive illegal trade moments before the market closed.

Prosecutors played the tape Wednesday in the insider trading trial of Galleon Group founder Raj Rajaratnam (rahj rah-juh-RUHT'-nuhm). They say Rajaratnam got an inside tip from a Goldman Sachs board member about a blockbuster offer from Warren Buffet and quickly placed an order for $43 million in Goldman stock.

The next day, prosecutors say, his stake in Goldman rose enough to earn him $1 million.

Earlier Wednesday, former manager Adam Smith said Rajaratnam coached underlings on how to make illegal trades look legitimate.

Smith is cooperating with the government. Rajaratnam maintains that he only made trades based on public information.



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