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Raj Rajaratnam's Fraud Conviction Just The Start

Publication Date: 
May 12, 2011
San Francisco Chronicle
Andrew S. Ross

Professor Joe Grundfest was quoted by Andrew S. Ross in the San Francisco Chronicle on how Raj Rajaratnam's conviction can help the government in prosecuting other insider trading cases.

Lessons learned from Raj Rajaratnam's conviction on 14 counts of conspiracy and securities fraud?

"One, do not engage in insider trading," said Joseph Grundfest, a former commissioner on the Securities and Exchange Commission, now a professor of law and business at Stanford University. "Two, if you do, don't get caught on wiretaps testifying against yourself."


"This verdict will increase (the government's) bargaining leverage in other cases," Grundfest said. "Other participants in this ring are now under much greater pressure to cut a deal."


"Silicon Valley is no more or less corruptible than Wall Street," said Robert Weisberg, a Stanford University law professor and co-director of the Stanford Criminal Justice Center. "But its networking atmosphere, which is very productive in terms of creativity and collegiality, sometimes veers into the legally problematic."

Next up: In the near term, say Weisberg and other legal observers, attention is likely to switch back to the Primary Global Research case, some of whose characters are directly linked to the Galleon case.