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The Insider Trades That Brought Down Raj Rajaratnam

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A Close Call

Rajaratnam continued to press his sources for exclusive information and his stock calls were strikingly accurate. Research he published on Intel, for example, was so precise that company executives became concerned he was getting inside information. The technology company decided to take action and set up hidden cameras around its office.

Intel soon captured video of product marketing engineer Roomy Kahn faxing confidential information to Rajaratnam. Kahn was sending detailed numbers about chip orders that Rajaratnam could use to accurately estimate the company’s earnings.

Intel executives reported Kahn to the authorities, who launched an investigation. Kahn later pled guilty and served six months of house arrest. Investigators couldn’t prove Rajaratnam traded on the inside information, however.

Photo: Getty Images