Here is a lesson for in house counsel that you should already know: emails can be searched, and the things you say on the phone or in an email can really come back to bite you. For an example, we need only to look to the Rajaratnam trial in Manhattan.
Raj Rajaratnam, who was heard on wiretaps at talking about setting up a false e-mail trail to create evidence that he did not buy a stock on which he had received inside information because of that information.
Instead, the Galleon Group founder tried to make it look like he had a separate reason for his interest in the stock, according to Anil Kumar, who has pleaded guilty and turned states evidence. The case has morphed into the biggest insider trading case in decades.
"You just have to be careful, right?" Mr. Rajaratnam told the former Galleon employees, adding that he would send an e-mail asking about a stock "so that we just protect ourselves ... We just have a[n] e-mail trail, right, that uh ... I brought it up, Rajaratnam said, The Wall Street Journal reports.
It was a decent plan, that is, if the calls weren't being tapped. They were. So now Rajaratnam's attorney is left to try to attack the government's witnesses as corrupt liars looking to save their own skin.
"When you got caught you pinned it all on Raj, didn't you?" Rajaratnam's main lawyer, John Dowd asked Anil Kumar in cross, Reuters reports. "No," Kumar replied. Dowd said: "You did what you could to get out of jail." "Wrong," Kumar shot back.
The Rajaratnam trial and the actions of the Galleon Group founder are yet another example of the risks that you take when you skirt the rule of law.
- Hedge Fund Manager and New Castle, LLC Employee Indicted in Galleon Insider Trading Case (FindLaw)
- 'Octopussy,' Others Plead Not Guilty In Fraud Case (The Associated Press)
- Securities Fraud (FindLaw)