Insider trading trial captivates South Asians

The Hindi word,which roughly means “all right,” was rarely heard a generation ago in Wall Street’s boardrooms or trading floors — or on trial tapes. But it appears over and over in transcripts of the phone conversations of Raj Rajaratnam,whose insider-trading case,the government’s largest in decades,was handed to jurors on Monday.

For many South Asian professionals in New York,the trial of Rajaratnam,a native of Sri Lanka,has become a gripping drama involving some of the most admired names in the diaspora. It only adds to the intrigue that the United States attorney who brought the case,Preet Bharara,is of Indian descent.

The trial has prompted soul-searching in South Asian circles and a debate over whether it has evoked the kind of outrage and embarrassment that many Jews felt over the Bernard L Madoff scandal. Some fear that a guilty verdict would tarnish the growing number of South Asians on Wall Street. And others feel the case’s only cultural significance is as a signal that South Asians have risen high enough in finance — as in other realms of American life — to be enmeshed in a multimillion-dollar debacle.

“Anybody who says they’re not watching it has got to be lying,because the people involved are certainly the pillars of Indian society in the United States,” said Prajit K Dutta,a Columbia University economics professor and a partner at the Aicon Gallery,which specialises in South Asian art. “I think there will be for a while this cloud hanging over the South Asian community.”

Rajaratnam,53,founded and ran the Galleon Group,a giant hedge fund that specialized in technology companies. He is charged with reaping $54 million on illegal stock trades and,if convicted,faces up to 25 years in prison.

Wall Street consists of countless overlapping circles that trade tips and information,so it comes as no surprise that Rajaratnam’s network included many other South Asian immigrants,along with a wide swath from other backgrounds. He met some in South Asian clubs in business school. Others he knew from networking events,social gatherings or charitable events among Indians,Sri Lankans and Pakistanis.

Many in Rajaratnam’s circle were well respected in the financial world,especially Rajat K Gupta,the former head of the consulting firm McKinsey & Company and a renowned business leader. Rajaratnam is accused of trading on illegal stock tips received from Gupta.

The prosecution’s evidence includes conversations,recorded by federal investigators,with Rajiv Goel and Anil Kumar,two Indian-born classmates from the Wharton School of the University of Pennsylvania. Both have pleaded guilty to insider-trading charges and testified against Rajaratnam.

Betwa Sharma,a reporter with the Press Trust of India,a news agency,covered the trial,but saw it more as a business story than as a South Asian one. “It’s interesting that South Asians are involved in this case,but I don’t think it’s that big a deal,” Sharma said. “They’re part of the system,and they’re going to do bad things like other groups that do bad things.” She said her readers were more interested in how the courts viewed insider-trading and wiretap issues.