Legal News

In Rajaratnam Criminal Case, a Whistleblower Emerges

By Ashby Jones

The WSJ’s Susan Pulliam reports:

A former Galleon employee filed a whistleblower complaint with the Securities and Exchange Commission in November and has agreed to testify for the government in its upcoming trial of the hedge fund founder Raj Rajaratnam, the whistleblower’s lawyer, Stuart Meissner says.

Click here for the NY Post story on the matter, from earlier Friday.

The former Galleon employee, whose name is not known, has filed for such “whistleblower” status, which, under the Dodd-Frank law, could give him or her a cut in any recovery made by the authorities that resulted from original information provided by the whistleblower.

What value would the whistleblower’s testimony have? Perhaps not all that much, even in the unlikely event this person is called to testify at trial. One person close to the situation said the whistleblower provided information that may have already been known to prosecutors.

Furthermore, the case against Rajaratnam, who has denied any wrongdoing, has been in the works for years (and is headed for trial on March 8.)

Finally, it’s  not clear prosecutors would want to  rely on  “whistleblowers” who, under the Dodd-Frank law, may ultimately get paid for information.

A spokeswoman for the U.S. Attorney’s office in Manhattan declined comment. A spokesman for Mr. Rajaratnam declined comment.

Full post as published by Law Blog - WSJ.com on February 25, 2011 (boomark / email).