RAJARATNAM HAD BEEN TRADING ON INSIDE INFO LONG BEFORE 2009
Court documents now confirm that Raj Rajartnam had been trading on inside info for at least a decade. I caught a fair amount of flak in October (some of which was quite public) for assuming that Galleon’s returns were “Madoff-like” and most likely due to years of insider trading rather than true alpha generation. I have run risk adjusted returns on thousands of portfolios and never come across numbers such as Galleon’s. They were simply too incredible. Too flawless. And totally lacking in negative volatility. My assumption that Galleon had been breaking the law was just that – an assumption. But a highly educated one at that. And although prosecutors only have trades going back to 1999, I would venture to say that Galleon was breaking the law well before that….
