6 Unresolved Questions in the Wake of the Rajaratnam Guilty

by Derek Loosvelt | May 11, 2011

1. How many years will Raj Raj serve?
Will he get the whole 19 1/2 years? Or will he receive leniency? The over/under has been set at 15 years. The sentencing has been set for July 29th. Place your bets! (My money's on Raj getting slapped with the max.)

nutty professor2. How will the verdict affect other insider trading cases that the U.S. is pursuing?
As DealBook points out, Raj Raj was the United States' "12-point buck," and so hanging Raj above the mantle certainly gives the government some confidence going into other insider trading cases on the docket. And, as U.S. Attorney Preet Bharara said in a statement issued minutes after the verdict, "We will continue to pursue and prosecute those who believe they are both above the law and too smart to get caught." In other words, we (the U.S.) will continue to wire-tap the heck out of anyone who we suspect is trading on material inside information. That said, it still remains to be seen if the gov can shoot down more big bucks. Perhaps taking out the hefty Rajaratnam was just a lucky shot?

3. Will "the hipster juror" find a drummer for his band?
During his inevitable 15 minutes of fame, Mr. Hipster will likely be rolling his eyes till the cows come home (as he famously did during the waning days of the trial); he will also likely be receiving hundreds if not thousands of applications for his coveted percussion opening (which he advertised at the outset of the trial). So the probable answer to this one is: indeed, he will.

4. Is it possible that Rajaratnam will win on appeal?
It is. But it's unlikely. To win on appeal, Raj Raj's lead lawyer Johnny "Cochrane" Dowd will have to prove that the wire-tapped telephone calls, which incriminated his client, should not have been entered into evidence -- which seems like a long shot. Still, Johnny D. will not go down swinging. "We'll see you in the second circuit," Dowd defiantly told reporters just after the guilty verdict came crashing down, referring to the Second Circuit Court of Appeals.

5. How will the verdict affect those wishing to inside trade in the future?
While the U.S. government believes that nabbing Raj Raj with his hands in the cookie jar and sending him upstate for (up to) two decades will deter others from following in the big guy's heavy and crooked footsteps, what will actually happen is this: the future inside traders of the world will not stop inside trading at all; they will, though, stop talking strike prices and mergers and earnings releases on smart phones, disposable phones, rotary phones, and any other type of easily-tapped piece of technology that resembles a phone -- and will, going forward, limit their exchanging of illegal material inside 411 to the old-fashioned way of surreptitious communication: talking face to face, in the men's room, after sweeping the stalls for bugs.

6. Who will play Raj Raj in the movie about the Galleon scandal?
Though there's no clear frontrunner to the million-dollar question, some early favorites are "New Jersey Governor Chris Christie after a vacay in Sicily," "Eddie Murphy with 'Nutty Professor' prosthetics" and "a plump Wesley Snipes." (As for who will inhabit the role of ex-McKinsey managing director Rajat Gupta, there does appear to be a clear favorite: Sir Ben Kingsley -- in diapers).

(CNBC: Why Raj Verdict Is a Game Changer on Wall Street)

(DealBook: The Galleon Case Is Nowhere Near Over)

(Dealbreaker: Casting the Raj Rajaratnam Movie)

(Related: Rajaratnam Found Guilty on All 14 Accounts)

Filed Under: Finance


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