Just before I retired from the FBI I worked a case on a woman named Roomy Khan. We caught her red-handed faxing insider financial information on her employer, a major electronics firm, to Raj Rajaratnam, who ran the Galleon Hedge Fund. There were a number of bad turns of luck in that case that I won’t go into here, but before I left I interviewed her and got her to agree to cooperate with the government in an insider trading case against Raj. I then retired from the FBI to take another job, but after I left she was convicted of wire fraud. She did no jail time then and I suspect only pretended to cooperate. I lost track of what happened in that case for a few years, but as it turned out she was caught again doing insider trading and the second time “came to Jesus” if that expression can be used on a Hindu. She agreed to what is known as consensual monitoring of her phone calls to Raj, which proved he was engaged in insider trading. That in turn led to wiretaps on his phones, the first wiretaps in US history used on an insider trading case. By that time Raj was a billionaire and the network of his insider contacts who share non-public information was huge. He was eventually convicted of insider trading and sentenced to eleven years, the longest sentence ever for insider trading. Over twenty defendants, including many Silicon Valley executives, were convicted in the case. It turned out to be one of the biggest cases of my career, although it didn’t come to fruition until more than 10 years after I retired.
Recently, a book about the case was published. This review is the one I published on Amazon.com. I hope to publish more book reviews in this blog.
The Billionaire’s Apprentice:
The Rise of The Indian-American Elite and The Fall of The Galleon Hedge Fund
by Anita Raghavan
The author has done a superb job of detailing the crimes of a small cabal of Indian-Americans at the highest echelons of business and finance in America. Her account is unrelenting and unforgiving despite her admitted difficulty in broadcasting the dark side of her own community. That she has been a professional writer for a major financial magazine for years is evident in the clear prose and accurate reporting.
The book will probably be of primary interest to those in the South Asian community, especially Indian-Americans in the world of business and finance. It focuses largely on the three Indian defendants in the largest insider trading case in American history, Rajaratnam, Kumar, and Gupta, and it includes their family backstories in rather great detail. This was of little interest to me, not being a member of that community and having almost no familiarity with India, its culture, and its broad diversity of culture, religion, language, and geography. Considerable emphasis was also placed upon the irony of the role of major Indian prosecution team players. Both the lead SEC attorney and the Manhattan U.S. Attorney were Indian-American and dogged in their pursuit of the insider traders.
Although not interested in the Indian diaspora per se, I was, however, fascinated by the crime itself — its brazenness, its sleaziness, the arrogance of the defendants, Raj Rajaratnam and Roomy Khan in particular. The lead FBI agent, B.J. Kang, is mentioned several times, but I would have liked to have read more about the FBI investigation. I was also disappointed that the scope of the investigation was not emphasized more. More than twenty defendants were convicted, and there may still be spinoff cases being pursued. I understand the author’s perspective was more on the Indian diaspora than the crimes themselves, but I do wish she had at least included in the afterword a list or table of all the defendants, their titles or employment while they were engaged in insider trading, and what their final sentences or job losses were. Danielle Chiesi deserves a few lines at least.