Before the Galleon Group CEO was charged with insider trading last fall, the SEC suspected him of illegally trading shares of another company, Computer Associates. What tipped them off? A conversation with a hedge-fund executive who asked him over IM if he was betting the company's shares would decline. Per the Post:
Rajaratnam replied yes, saying, "My guy has seen the press release," according to testimony presented yesterday in an evidentiary hearing.
"I know you are kidding," the hedge fund executive responded, adding that his instant messages are recorded by his firm. "Oh sh**t," Rajaratnam texts before clarifying that the press release was about the "Yankees releasing Derek Jeter," the Bronx Bombers star shortstop, who is very much still with the Yankees.
Fortunately for Raj, it was 2006, when the agency was still trying out a "Let's wait and see how epically large and preposterous this fraud can become before doing anything about it" method of crime-stopping, thus this did not pass muster as evidence.
Raj stole CA signs: SEC [NYP]