New York, NY (GenevaLunch) – Six people involved with hedge funds have been arrested in the US by the FBI and charged with insider trading. The group includes Raj Rajaratnam, who founded the Galleon Group, and who is on a Forbes magazine list of the world’s wealthiest people, worth an estimated $1.3 billion. Rajaratnam held a plane ticket for Geneva for the coming week, prosecutors say. Galleon is estimated to have $7 billion in assets under management. It appears that the group was arrested now because Rajaratnam had been tipped off that one of them was being listened to by the FBI.

This is the first time that court-approved wiretapping has been used to catch conversations between suspects and it is also the largest-ever hedge fund case, US attorneys told a press conference Friday 16 October. The others arrested all have high-level jobs: Rajiv Goel, Intel Capital, a director of strategic investments; Anil Kumar, a McKinsey director; Robert Moffat, senior vice-president, systems and technology division at IBM; Danielle Chiesi and Mark Kurland, New Castle Partners.

US prosecutor Preet Bharara told journalists that investor advisors should be asking themselves “”is law enforcement listening?”

Links to other sites: AP, BBC, US Justice Department press release

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