Hedge Fund Closing That Put a lot of Prostitutes Out Of Work

During the investigation of Rajaratnam, the FBI received an anonymous letter

“…Prostitution is rampant for executives visiting Galleon. You will find that the Super Bowl parties for the executives, paid for by Galleon Group, include prostitutes and other forms of illegal entertainment. In return, the executives provide Galleon the unfair edge that the fund leverages so well.”

For a quick background, read this.

Raj flew a group of people on his private plane to the Superbowl every year for a weekend of partying. The investigation into Galleon began with a letter that was sent to the SEC. It read:

“It is hedge funds like Galleon Group that create wealth for their shareholders and themselves at the expense of innocent investors… Insider trading word in this fund should be changed to insider partnership and prostitution… Prostitution is rampant for executives visiting Galleon. You will find that the Super Bowl parties for the executives, paid for by Galleon Group, include prostitutes and other forms of illegal entertainment. In return, the executives provide Galleon the unfair edge that the fund leverages so well. The letter was signed, Seeking integrity in business.

 

From left to right: Anil Kumar, Danielle Chiesi, Raj Rajaratnam, ...

Also fascinating: what happened when they all got caught. Raj, Kumar, and Danielle Chiesi were all arrested on the same day.

 Danielle Chiesi

Danielle Chiesi

Raj was arrested at his apartment at Sutton Place, then released on $100 million bond. “Within hours, Adam Smith and Rengan Rajaratnam had removed evidence from the Galleon offices.”

Kumar fainted when the cops put handcuffs on him. “He fainted, hitting his head against a wall. He had to be treated at a local hospital before he could be brought in for booking.”

Chiesi woke up to four agents wearing bulletproof vests knocking on her door at 6 AM. “The agents spent an hour showing Chiesi a file of evidence before concluding that she wouldn’t coöperate. She refused to place a monitored call to someone on the West Coast—probably Hector Ruiz.”

Later the same day, Raj’s wife, Asha Rajaratnam, sent a text message to Kumar’s wife, Malvika: “I’m sorry.”

Raj with wife Asha

 

 

Read more: http://articles.businessinsider.com/2011-06-23/wall_street/30078253_1_raj-rajaratnam-galleon-group-danielle-chiesi#ixzz1n5MJPOOy

http://thegrindstone.com/career-management/when-hedge-fund-galleon-closed-it-put-a-bunch-of-prostitutes-out-of-work/

 

 

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