Billionaire Arrested for Alleged Insider Trading

Billionaire hedge fund founder Raj Rajaratnam was arrested Friday and charged with running the largest hedge fund insider-trading scheme in history. Charged with Rajaratnam, founder of Galleon Group, were executives of several prestigious U.S. companies.

Reuters:

Billionaire hedge fund founder Raj Rajaratnam and executives from some of the most prestigious U.S. companies were charged on Friday with the largest hedge fund insider-trading scheme ever.

Investigators said they used court-approved telephone wire taps for the first time in a Wall Street insider trading case, sending shivers through the hedge fund industry which has traditionally picked up and shared trading tips to make big profits.

At the center of the case are Rajaratnam, his Galleon hedge fund and two executives from hedge fund New Castle, which was a unit of Bear Stearns Asset Management before Bears Stearns Cos collapsed in 2008, but is still in operation.

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Raj Rajaratnam is led away by FBI special agents.