Rajaratnam legacy still haunts hedge funds

Hedge Fund

The ghost of Raj Rajaratnam still haunts hedge funds. Some make employees sign pledges that they’ve not acted on illicit tips, others snoop on their traders with keystroke-reading software. At the compliance meetings everybody has these days, prison isn’t an off-the-wall topic.

Bloomberg News reports that the illegal-trading probes that netted crooks at more than a dozen funds may have reached an unofficial finale with a whimper last week -- a deal allowing SAC Capital Advisors LLC’s Steven A. Cohen to return to the industry in two years -- but the chill from the fates of Rajaratnam and the 75 others convicted hasn’t faded. The legacy of the crackdown might be a healthy suspicion that Big Brother really is watching.

“It’s now been drilled into the public consciousness that insider trading is a high-risk proposition,” said Stephen Crimmins, a lawyer with the U.S. Securities and Exchange Commission from 1987 to 2001 who’s now with the firm Murphy & McGonigle. “Ten years ago, people figured that the odds were pretty good that they wouldn’t get caught.”

To access the complete Bloomberg News article hit the link below:

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