ravishingravi Posted October 27, 2011 Posted October 27, 2011 But the line between the two is clearly drawn IMO. I don't think that would be an area of contention if charges have already been levied.
achilles Posted October 27, 2011 Posted October 27, 2011 You cannot be serious' date=' right ? He is a fraudster or at least an accused of insider trading. There is evidence against him. Hate to go on self flagellation mode again but we Indians don't exactly have reputation across the world for being ethical.[/quote'] We cannot deny the fact that Mr.Raj was clearly given one of the severest punishment for all high-profile Internal Trading convictions to date. 11years is just too much. And Mr.Gupta is headed down the same road.
yoda Posted October 27, 2011 Posted October 27, 2011 Its quite a prevalent practice here. And honestly, there is no way that it can be checked or even detected. Detection happens only when someone involved spills the beans or realizes that he has made lesser money than his friends. :P It can also be detected based on unusual activity from and between accounts. Also proving that some one made a profit based on insider information ( which at times, can be speculative in nature) and getting a conviction is very difficult. Unless the case involves huge amounts of money, people let them be. Why is it difficult to get a conviction once you have evidence the person got insider information AND that he made money off it? Huge money is a relative term. Rajarathnam made millions whereas Madoff swindled people for billions. What is the Yankee equivalent of the SEBI? Do you guys have such a regulatory body? I was surprised to see the FBI handle such crimes. In India we have the ED (primarily) and the CBI who would look into such cases. SEC is the equivalent of the SEBI. FBI deals with all crimes internal. They will work with the corresponding regulatory body like the SEC who will do the initial investigation. AFAIK, insider trading is not illegal for the sake of it. The illegal part ( what you are liable to get booked for) is market manipulation. It is illegal if the information is non-public at the time of it's usage. Market manipulation can happen with or without insider information and that is a separate offense by itself. When you buy and sell reasonable amount of shares (relative to the size of the company) based on insider information, you will be moving the market in one direction altho temporarily, so the manipulation is kind of embedded in your insider trading relating activity.
Mariyam Posted October 27, 2011 Posted October 27, 2011 It can also be detected based on unusual activity from and between accounts. No. Only foolish criminals would be detected that way. It would take someone of monumental levels of stupidity to trade illegally from his own account or the account of some one known. Read the following, based on a real time case. In which, in spite of discovering a lot of stuff, the Court wasn't able to convict the inside traders. Let me give you an example. Why is it difficult to get a conviction once you have evidence the person got insider information AND that he made money off it? Huge money is a relative term. Rajarathnam made millions whereas Madoff swindled people for billions. I'm bored of typing now, so in short: It is next to impossible to establish that a certain piece of information resulted in a certain profit. For that, the extent of the information leaked, its action-ability and the reaction of the supposed insider trader must all be accurately established. These guys are CEO. They know a few things about having to cover their tracks. Also their lawyers make life hard for the opposition. Especially when the knowledge is speculative in nature. Characters: Yoda: CEO for xyz constructions and a fan of Chennai Drag Queens Mariyam: Upright lawyer, leading light of the world and a fan of the champions of champions, MI Holysmoke: Angadia, fellow MI fan and a cool guy The Outsider: Judge and IPL hater BossBhai: Yoda's lawyer and IPL hater Ganesh: Yoda's friend and co-conspirator, shares yoda's passion for supporting crap sides Background: Yoda is the CEO of a construction company who have recently bid for the contracts for the new mono rail in the city. The meetings with the metro officials are planned on the 2nd of January. Act 1: Under the flood lights at the Chepauk stadium, Dec 22nd 2010 Yoda, the eternal schemer, plans to make money of this and gathers a few of his close friends. He tells them that there is a high probability that his company may land the contract. The following conversation ensues: Ganesh: Great idea Yoda. We can make a lot of money with this information. Yoda: I know. Maybe I'd wire some to CSk so that they can buy Malinga for the next season. Yoda: But, I don't want to get caught. Ganesh: I have an idea. Lets call an angadia. I know the guy, he's discreet and very trustworthy. But he will ask for a cut. Yoda: Whats an angadia???? Ganesh: Basically, in Gujjuspeak an angadia is a courier and a middleman. Mainly in the stock and the diamond markets. All transactions happen through him. All money transfers occur via him. So that way, the transactions between the brokers and the angadia are notional and there is no transfer of money from one account to the other, unless asked for. At the end of a decided period of time, all accounts are settled by cash. Yoda: Wow. Do you know any such person? Ganesh: Enter Holysmoke Yoda: Mr. Holysmoke, can you do this? Holysmoke: Ho jayega balak. ( makes a few phone calls from his Iphone). Yoda: What will be your share? Holysmoke: 50% and you don't have to bother or know how I will split the money with the people whom I ask to invest. This will be our last meeting. Being the pathetic CSK fan you are, I have no inclination to meet you again anyways. Yoda: ( feigns a fake laugh) and shakes hand. Act2: Sep1st 2011, Court Room Mariyam: Judge saab,Mujrim Yoda has leaked insider info to make money The Outsider: Kanoon saboot mangta hai!!! Mariyam: I have detailed records of transactions in which many people started buying shares of the xyz const. company after 25th Dec last year. BossBhai: Sher e phorum, these records mean nothing. I have done detailed statistical analysis on these records and they don't indicate anything. Not any of the days has the trading on that particular share gone to more than 10% of the average daily amount. Furthermore, so many people have bought shares of that company that it is impossible to say that the leak has been so large. ** evil smirk** Mariyam : speechless BossBhai: Furthermore, so many of those who bought these shares sold them off a few days later, even before the deal was finalized. Surely they wouldn't do that if there was a leak. ( this is a deliberate ploy used to throw investigators off track). Mariyam: speechless and ready to take down BB with a karate chop The Outsider: Tamam gawahon aur sabooton ko matt-e-nazar rakhte hue, ye adalat is natije pe pohonchi hai ki Yoda pe lagaye gaye sab ilzamaat bebuniyad hai. Lihaza ye adalat Yoda ko baizaat bari karti hai. Epilogue: Yoda: We pulled it off. But how? Ganesh: There was no money trail. No one transferred any money to any one else. Between the angadia and his brokers all trade is notional. You got your 50% in cash or in the absolutely unknown accounts. Furthermore, the angadia asked the brokers to buy in small quantities over a period of time. He also asked some to sell the shares. How much do I get? Yoda: since you've been a great help, and being the magnanimous guy that I am, you get 3%. Ganesh: :mad: 1 year down the line. Yoda: Buys Malinga for CSK and they still lose to MI the next season Ganesh: Opens an almond factory Holysmoke: Buys a Ferrari BB and The Outsider: Troll each other on Sachin vs ______ threads Mariyam: Trolls CSK fans on IPL threads Edit: Any resemblance to mainstream ICF posters is merely coincidental. Welcome to the world of financial fraud and deceit. The above btw, is based on an actual case. No conviction. Nothing. SEBI and the ED fight over what is their jurisdictional authority and who is supposed to investigate what exactly. Hope you get the drift.
Mariyam Posted October 27, 2011 Posted October 27, 2011 I am not questioning legality of insider trading. Gray area is around what can be termed as Insider trading and what can not be. It all depends whether information that you are passing on is "material" information or "non-material" information. Somebody betting on speculations and getting lucky in process, can not be accused of insider trading. . Well said. +1 Its not as straight forward as a few here make it out to be.
yoda Posted October 27, 2011 Posted October 27, 2011 LOL @ Act Dramatis. Mariyam, there have been real cases in the US of people getting caught off trading patterns. These are software alerts which are used to track unusual activity. Can be from any account and the FBI will trace it back to you, that's their job. Also, insider trading doesn't mean market has to move substantially due to your trades. You had insider information illegally and acted on it to make money. That is good enough to get convicted which is what happened to Rajratnam.
The Outsider Posted October 28, 2011 Posted October 28, 2011 Nice Shakespeare act, Mariyam. There has been a conscious drive on behalf of the federal agencies to clamp down on insider trading in the US over the past few years. There was an article recently about how the average jail term has gone up consistently over the past 20 years in insider trading cases and a lot of circumstantial evidence, which would not normally be given much weight, has been used to hand sentences. For example, in this case, the onus will be on Rajat Gupta to explain why he made those phone calls to Rajaratnam a few seconds after the Goldman Sachs board meetings. The prosecution will then try to link those calls to transcripts of Rajaratnam stating to others how he got the information from inside sources at Goldman. From all accounts, the prosecution is taking a bit of a gambit by pursuing this case in the absence of any wiretapped conversations, but given the recent trends against insider trading, I won't be surprised if the fraud gets his comeuppance.
Ram Posted October 28, 2011 Posted October 28, 2011 These guys are smart enough to become CEO and Directors of some of the BIGGEST financial corporations in the world, but also dumb enough at the same time to use their very own cell-phone to call the cell-phone of fraudulent trader, 23 seconds after coming out of a board-room meeting? How hard is it to create a few bogus e-mail accounts and exchange messages there? Or even hand a note to a colleague who’s in cahoots and ask him to call Rajaratnnam’s colleague and ask him to relay the message? This is criminal conspiracy 101! :hitler:
The Outsider Posted October 28, 2011 Posted October 28, 2011 Well, email communication is very easy to track. In this case Rajaratnam's phone and emails were being tapped so it would be trivial to figure out who sent him the information and then there is actually no getting away from it. In case of a phone conversation at least one can feign the topic of discussion to be whatever fancies the imagination. And in one of the alleged phone calls, it was Gupta's personal assistant who made the call, who will likely testify for the prosecution. Also, it doesn't help his case that Anil Kumar - another accused in the trades - has pleaded guilty and might be called upon as a witness.
Alchemist Posted October 28, 2011 Posted October 28, 2011 Its quite a prevalent practice here. And honestly, there is no way that it can be checked or even detected. Detection happens only when someone involved spills the beans or realizes that he has made lesser money than his friends. :P Also proving that some one made a profit based on insider information ( which at times, can be speculative in nature) and getting a conviction is very difficult. Unless the case involves huge amounts of money, people let them be. What is the Yankee equivalent of the SEBI? Do you guys have such a regulatory body? I was surprised to see the FBI handle such crimes. In India we have the ED (primarily) and the CBI who would look into such cases. AFAIK, insider trading is not illegal for the sake of it. The illegal part ( what you are liable to get booked for) is market manipulation. In US, they dont have to prove profit or loss. Insider trading is iillegal, doesn't matter you make profit or loss. Is you make a loss, it might never show up, but that doesn't make it legal.
akshayxyz Posted October 31, 2011 Posted October 31, 2011 A good read on why Raj didn't take a plea. http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html
beetle Posted November 1, 2011 Posted November 1, 2011 A good read on why Raj didn't take a plea. http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html Very interesting. Not just present Indians but ancient(sages 3000 yrs back)ones too screwed him bad......:--D
Raghav_12 Posted November 1, 2011 Posted November 1, 2011 :beee:A good read on why Raj didn't take a plea. http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html Very well written, intersting read. One quote from this story I would like to highlight, ŧor years these guys were sitting around in sports clubs and exchanging information. That wasnÃÕ a crime. And now we immigrants do the same thing and it is?Ǽ/QUOTE] This may not be absolute truth but many people outside ICF also feel that Galleon people have rather been targeted.
punjabi_khota Posted November 1, 2011 Author Posted November 1, 2011 A good read on why Raj didn't take a plea. http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html That is a powerful story. :nervous:
urbestfriend Posted November 1, 2011 Posted November 1, 2011 A good read on why Raj didn't take a plea. http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-t-take-a-plea.html Very interesting...How greed has ruined all of them:(( What's sad is these are very common occurances here in India, yet no one gets punished..Speaks a volume about the difference between their and our society. Wish out justice system was as strong as US or UK's.
urbestfriend Posted November 1, 2011 Posted November 1, 2011 Poor guy, Indians ditched him badly..But he should've known when he was cheating,
veer Posted November 1, 2011 Posted November 1, 2011 hmmm.. interesting read on raja. two startling points.. - the attorny that is going after these guys is an Indian. why is he not going after other people.. (jewish gang) - he stood his ground.. but Indians didnt..
Sachin=GOD Posted November 1, 2011 Posted November 1, 2011 You would do better if you research a bit before making such sweeping statements, particularly on the matters you have no clue about. Somebody who started from India (IITD alum) and went on to become CEO of world's one of the top most, if not absolutely top, Consulting firm, McKinsey, has to be more than a "Desi Fraud". He is widely recognized as first Indian born CEO of a global corporation. His list of achievements in corporate is really long. He is also one of the founders of ISB. http://en.wikipedia.org/wiki/Rajat_Gupta However, it is unfortunate that after an such exemplary career, he has to face all this litigation after his retirement. ok, he's an "international fraud" - ab khush :winky: fraud karega toh litigation toh face karna he padega....
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