Some guy named Henry Blodget wrote that “there’s not a doubt in my mind” that Raj Rajaratnam will be convicted of insider training. The fate of the portly hedge fund billionaire has come up in an office straw poll, Blodget wrote on Business Insider.
“The distinctions the defense team is trying to draw between ‘confidential’ information and ‘material non-public’ information seem preposterous,” Blodget went on to assert.
In the name of fairness, Blodget conceded that Courtney Comstock, a Business Insider editor who has attended the trial is impressed with the defense and thinks that “Raj will walk.” But Katya Wachtel, another editor who’s been watching the proceedings in the Southern District of New York, thinks “Raj is toast.”
Isn’t it insensitive to watch the trial as though it were a sporting event, since it could end with Rajaratnam going to prison for a couple of decades? Yes, it is. But it’s human to take pleasure in another person’s troubles, especially if he’s rich.
And Rajaratnam certainly is rich, from the Galleon Hedge Fund LLD that he co-founded and — so U.S. Attorney Preet Bharara contends — from illegally profiting from insider information.
So far, Comstock is impressed with the skill of Rajaratnam’s lawyers in “neutralizing the evidence.” As for the supposed insider information Rajaratnam got from his friends on the inside, Comstock observed, “It might have been wrong for company employees to reveal it, but the information was out there in the semi-public domain. So the prosecution will have to prove that the information that Raj got was more accurate than the information that was out there from other company sources.”
If that sounds confusing, well, that might be good for Rajaratnam. Confused jurors may find it hard to convict — or to reach a verdict at all.
But what, you may ask, qualifies Henry Blodget to hold forth on such matters? Wait, don’t we know that name from somewhere? Of course we do! As a young analyst with Merrill Lynch, he publicly promoted some Internet stocks, even while labeling them “junk,” “toast” and other, unprintable adjectives. He ran afoul of the Securities and Exchange Commission and the New York attorney general’s office, negotiated a deal in which he didn’t admit anything, paid a big fine and agreed to exile from the securities business.
All of which would seem to qualify Blodget to discuss the difference between behavior that’s criminal and behavior that’s shrewd, or greedy, or cynical.
Oh, the New York Attorney General who helped banish Blodget was a guy named Eliot Spitzer. Whatever happened to him?