NEW YORK — The start of the insider-trading trial of a one-time billionaire today is expected to offer a rare look at the seamier side of Wall Street as prosecutors play taped conversations to try to prove that the powerful hedge-fund founder conspired to earn more than $50 million illegally.
U.S. Attorney Preet Bharara announced the October 2009 arrest of Raj Rajaratnam by saying it was the largest hedge-fund insider-trading case in history and marked the first extensive use of wiretaps in a white-collar prosecution. Since then, charges have been brought against more than two dozen others — and 19 of them have pleaded guilty.
Evidence gathered during the investigation also has led to a separate probe of those who peddle inside information as the product of legitimate research. That investigation has resulted in nine arrests, with more defendants likely.
The trial for Rajaratnam, 53, of Manhattan, is expected to last about two months. Rajaratnam, free on $100 million bail, has maintained his innocence, saying any trades he made were based on publicly available information.
