20 million dollars Wall Street fraud: FBI arrests Indian origin billionaire Raj Rajaratnam

Indian origin billionaire investor Raj Rajaratnam, founder of Galleon Group, was arrested over an alleged 20 million dollars insider trading scheme that US prosecutors called the biggest ever involving hedge funds.

The Federal Bureau of Investigation arrested him on Friday in New York along with five others tied to the case.

Galleon Group said in a statement that it is “shocked by the arrest” of Raj Rajaratnam and had no knowledge of the investigation before today.

Federal authorities have uncovered what they say is the largest case of insider trading ever at a hedge fund – netting an alleged 20 million dollars in illegal profits, The Christian Science Monitor reported.

Hedge funds have been touted in recent years to wealthy investors and pension funds as a new “asset class,” to be tapped alongside traditional stocks and bonds. Often they rack up solid returns while carefully hedging their bets (hence their name). But they are also secretive, insular, and little regulated.

Authorities said the arrests on Friday show they are pursuing fraud at high levels of Wall Street with the same determination, and the same tools, that they use on drug lords or mobsters, the report says.

“This case should be a wake-up call for Wall Street,” said Preet Bharara, US Attorney for the Southern District of New York, who announced the arrests along with the FBI.