In Manhattan’s Federal District Court today, 51 year old, Anil Kumar plead guilty to one count of securities fraud and one count of conspiracy to commit securities fraud with Raj Rajaratnam. He also agreed to cooperate with prosecutors in the widening investigation. Mr. Kumar is the 7th person to pled guilty in what some are calling the biggest hedge fund insider trading scheme case in US history.
Mr. Kumar admitted that from 2003 to 2009 he received $2.6 million from
Galleon hedge fund founder and billionaire Raj Rajaratnam in exchange
for confidential information about clients he was working with to make
illegal stock trades.
In order to hide the cash payments, Mr. Kumar admitted that Mr. Rajaratnam
opened a Swiss bank account for him under a different name and then funneled
the payments to the account, and eventually into Galleon’s hedge
funds. Mr. Rajaratnam praised Mr. Kumar for the information he provided,
at one point telling him he was, “a hero,” according to prosecutors.
As a result of his guilt plea, Kumar could face up to 25 years in prison.
Charges against Mr. Rajaratnam, who earlier plead not guilty, are also pending.