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Insider-trading pays a lot, until you’re busted

Raj Rajaratnam, founder of the Galleon Group and self-made billionaire (Forbes estimate: $1.8 billion), was among six people arrested on Saturday for being part of an insider-trading syndicate. Rajaratnam and co. were nabbed after a two-year phone-wiretap investigation that was spurred by a disenchanted employee. The gang was involved in purchasing valuable pieces of information that were helping them make the stock move accordingly. They made money on Sun Microsystems, Google, IBM, Akamai and many others. Two of the best deals involved finding out that Blackstone would buy Hilton Hotels ($4 million) and advance knowledge of Google’s results ($8 million). What is pretty surprising is that, all in all, they are accused of making $20 million in profit, a paltry sum compared to Rajaratnam’s $1.8 billion wealth and utterly insignificant compared to Bernie Madoff’s scheme. What a stupid move.

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