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Insider out

Money | Hedge fund billionaire found guilty of fraud

Issue: "Dating and courtship confusion," June 4, 2011

In the largest-ever insider-trading case, billionaire hedge fund manager Raj Rajaratnam was found guilty in U.S. District Court on 14 counts of securities fraud and conspiracy. Prosecutors said the 53-year-old Sri Lankan native cultivated a network of tipsters who supplied him with information about yet-unannounced mergers, acquisitions, and earnings forecasts, thus propelling Rajaratnam's Galleon Group to millions of dollars in returns at the expense of other investors who didn't have that information.

In a statement, U.S. Attorney Preet Bharara described Rajaratnam as "one of the most educated, successful, and privileged professionals in the country" who "let greed and corruption cause his undoing."

The unanimous verdict-which came on the 12th day of deliberations- followed an eight-week trial in which prosecutors made use of dozens of wiretap recordings of Rajaratnam speaking with his various contacts. Some of the people heard in the recordings testified against the hedge fund manager, after entering guilty pleas in related cases.

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Rajaratnam is the 35th person to be convicted or plead guilty in insider-trading cases since the government launched a crackdown in late 2009. His sentencing is set for late July, but his lawyers plan to appeal the verdict.

Sorrowful Sears

Following a months-long awareness campaign launched by the Mississippi-based American Family Association (AFA), Sears issued a written apology for selling sexually explicit films via its website. The company said the sale of the DVDs occurred because of an error by a "vendor" that Sears declined to name.

"We sincerely apologize to any customers who were offended," the company said in a statement. "We are removing these items that do not meet our guidelines."

Like other online retailers, Sears generates a portion of its income by allowing third-party companies to sell merchandise through its site via an automated system that doesn't monitor the product details of each item.

AFA began calling attention to sexually explicit products in the Sears online store last August, but the company repeatedly denied such items were available. The number of pornographic DVDs that could be purchased via the Sears website ran into the hundreds, according to AFA, along with explicit posters and music.

Fewer tithers

The percentage of Americans donating at least 10 percent of their income to churches and charities appears to have declined sharply since last year. New research from the California-based Barna Group found that only 4 percent of U.S. adults tithed their income as of early 2011. "This is slightly below the levels of the last 10 years and significantly lower than last year's rate [of 7 percent]," Barna reported. Over the past decade, the percentage of those donating at least a tenth of their income has hovered between 5 percent and 7 percent.

The 2011 figures are from a January/February tracking study of 1,608 adults (age 18 and older). A caveat: Barna noted that the research had a possible margin of sampling error of ±2.6 percentage points.

Joseph Slife
Joseph Slife

Joseph is the senior producer of WORLD Radio and the co-host of The World and Everything in It.


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