Wall Street as Yossarian: The Other Effects of the Rajaratnam Insider Trading Conviction
―Without warning, the patient sat up in bed and shouted, I see everything twice!‟
And thus Yossarian, the war-weary bomber pilot of the masterful novel, Catch-22, was able to malinger in an Italian hospital even longer while nervous doctors attended to the strange malady of his neighbor.
The storied literary diversion may highlight the good fortune of those evading government prosecution of financial crimes in 2011, a year that fulfilled the promise that observers of hedge fund discipline would similarly see things twice. To wit, in May 2011, a Manhattan jury convicted billionaire hedge fund entrepreneur Raj Rajaratnam of fourteen counts of conspiracy and securities fraud. Chief among these convictions was the crime of insider trading. The case punctuated two years of criminal actions based upon insider trading allegations by the U.S. Attorney for the Southern District of New York, who had called Rajaratnam ―the modern face of illegal insider trading. Perhaps more significantly, five months later, Judge Richard J. Holwell sentenced Rajaratnam to eleven years in prison, in handing down the harshest sentence ever in such a case.