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1983 Wharton MBA graduate Raj Rajaratnam was found guilty on 14 counts of conspiracy and fraud in what has been called the largest insider-trading case in history.

The trial for Rajaratnam — the founder of hedge-fund management firm Galleon Group — concluded Wednesday. He was arrested Oct. 16, 2009 as the central figure in an illegal network of insider trading.

Prosecutors maintained that Galleon profited and avoided the loss of $63.8 million by trading in companies such as IBM, Google and eBay using inside information.

The trial was noteworthy for its use of wiretapped evidence recorded by the Justice Department over nine months in 2008, according to The New York Times.

“I heard yesterday from someone on the board of Goldman Sachs that they are gonna lose $2 per share,” Rajaratnam said to a Galleon employee according to a transcript of an Oct. 24, 2008, conversation recorded by investigators.

Former Intel Capital director of strategic investments Rajiv Goel and former McKinsey and Co. director Anil Kumar — also a 1983 Wharton MBA graduate — pleaded guilty in 2010 to engaging in insider trading schemes with Rajaratnam.

Rajaratnam will remain free on $100 million bail and be sentenced on July 29, according to court documents. He faces up to 25 years in prison.

“There are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have,” said prosecutor Preet Bharara, the United States attorney for Manhattan, in a May 11 Times article.

His conviction may serve as a deterrent to future inside-trading — even though deterrents typically aren’t effective, Penn Law professor Paul Robinson said.

“What’s interesting is this is a case where general deterrents will work,” Robinson said. He explained that the typical target audience for deterrents “don’t read the newspapers and aren’t rational actors.”

“The guy standing outside of 7-11 deciding whether or not to rob it doesn’t have a clue how likely it is he’ll be caught or the consequences, and might be irrational due to a drug habit.” However, insider-traders can be thought to be rational. “They will certainly hear about this case … they’re open to being generally deterred in ways that most criminals are not.”

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