Brother of hedge fund founder indicted in NYC

[Omaha Steve]

Source: AP-Excite

By LARRY NEUMEISTER

NEW YORK (AP) - The brother of a jailed one-time billionaire hedge fund boss has been charged with conspiring with his brother to cheat on Wall Street and earn nearly $1.2 million illegally, federal authorities announced Thursday.

Rengan Rajaratnam, 42, of Manhattan, was charged in an indictment returned Wednesday and unsealed a day later with conspiracy to commit securities fraud and six counts of securities fraud. He was not immediately arrested. His brother, Raj Rajaratnam, is serving an 11-year prison sentence after he was convicted in 2011 of earning up to $75 million by swapping secrets about public companies with other hedge fund managers and friends at public companies.

"As alleged, Rengan Rajaratnam and his brother shared more than DNA, they also shared a penchant for insider trading," U.S. Attorney Preet Bharara said. "Along with his brother Raj, Rengan Rajaratnam was allegedly at the heart of an insider trading scheme that swept up an unprecedented number of people in its web of corruption, and with his indictment, we are one step closer to closing that chapter."

George Venizelos, head of the New York FBI office, said Rengan Rajaratnam's "career arc paralleled his brother's.

FULL story at link.


Read more: http://apnews.excite.com/article/20130321/DA55MSP80.html

[MannyGoldstein]

1. If you cheat the 99%, you go to jail.

Cheat the 1%, you get a bonus and access to the White House.

[cbrer]

2. Too true

This action doesn't begin to scratch the surface of the greed, corruption, and ruthless lawbreaking that occured at every level of our financial services industry.

Should indictment or prosecution begin, law makers are afraid of where that rabbit hole leads...

[KansDem]

4. Don't you have that backwards?

"Cheat the 1%, you go to jail?"

Bernie Madoff is in prison today because he stole from the rich--

Sales methods

Rather than offer high returns to all comers, Madoff offered modest but steady returns to an exclusive clientele. The investment method was marketed as "too complicated for outsiders to understand". He was secretive about the firm’s business, and kept his financial statements closely guarded.[43] The New York Post reported that Madoff "worked the so-called 'Jewish circuit' of well-heeled Jews he met at country clubs on Long Island and in Palm Beach".[44] The New York Times reported that Madoff courted many prominent Jewish executives and organizations; according to the Associated Press, they "trusted [Madoff] because he is Jewish".[41] One of the most prominent promoters was J. Ezra Merkin, whose fund Ascot Partners steered $1.8 billion towards Madoff's firm.[45] A scheme that targets members of a particular religious or ethnic community is a type of affinity fraud, and a Newsweek article identified Madoff's scheme as "an affinity Ponzi".[46]

Madoff was a "master marketer",[47] and his fund was considered exclusive, giving the appearance of a "velvet rope".[45][47] He generally refused to meet directly with investors, which gave him an "Oz" aura and increased the allure of the investment.[35] Some Madoff investors were wary of removing their money from his fund, in case they could not get back in later.[12]

Madoff's annual returns were "unusually consistent",[48] around 10%, and were a key factor in perpetuating the fraud.[49] Ponzi schemes typically pay returns of 20% or higher, and collapse quickly. One Madoff fund, which described its "strategy" as focusing on shares in the Standard & Poor's 100-stock index, reported a 10.5% annual return during the previous 17 years. Even at the end of November 2008, amid a general market collapse, the same fund reported that it was up 5.6%, while the same year-to-date total return on the S&P 500-stock index had been negative 38%.[13] An unnamed investor remarked, "The returns were just amazing and we trusted this guy for decades — if you wanted to take money out, you always got your check in a few days. That’s why we were all so stunned."[50][clarification needed][51]

The Swiss bank, Union Bancaire Privée, explained that because of Madoff's huge volume as a broker-dealer, the bank believed he had a perceived edge on the market because his trades were timed well, suggesting they believed he was front running.[52]

http://en.wikipedia.org/wiki/Madoff_investment_scandal

Cheat the 99%? No problem...

[MannyGoldstein]

5. Yes, my bad! nt

[lonestarnot]

3. Two of how many?