The Galleon Case

1373 Words3 Pages
bulb-icon

Recommended: Greed ( essay

“Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power” (P. J. O’Rourke). The Galleon Group is precisely a story emanating a few members lust for power that was consumed by the essence of greed. Founded by Raj Rajaratnam and fellow partners in 1997, the Galleon Group quickly emerged to substantial wealth and incredible success as one of the largest hedge fund management firms in the world. Managing over seven – billion dollars in a series of funds that specialized in the healthcare and technology industries, the New York headquartered firm was on the fast track to stardom. Unfortunately, the firm became the center of a catastrophic insider trading scandal in 2009 which ultimately saw the demise of the firm as well as the apprehension of several avaricious individuals. The Securities Exchange Act of 1934 oversees the regulation and registration of securities exchanges, brokers, dealers, and national securities associations. Furthermore, the act authorizes the Securities and Exchange Commission (SEC) to engage in market inspection to hinder practices such as fraud, market manipulation and misrepresentation. In addition, Section 10(b) and SEC Rule 10b – 5 concerns the area most associated with this particular case known as insider trading. Both legal and illegal, insider trading transpires when individuals obtain “inside information” about the strategy of a publicly listed corporation and then buys and sells securities based on the premise of this knowledge. Legally, corporate insiders are at liberty to buy and sell stock within their own compan... ... middle of paper ... ....com. Bloomberg, 11 May 2011. Web. 01 Mar. 2014. Hurtado, Patricia. "Kumar Gets Probation for His Galleon Trial Cooperation."Bloomberg.com. Bloomberg, 20 July 2012. Web. 01 Mar. 2014. Miller, Roger, and Frank Cross. The Legal Environment of Business. Mason, OH: South Western, 2011. Print. O'Rourke, P. J. "Greed Quotes." BrainyQuote. Xplore, n.d. Web. 27 Feb. 2014. Protess, Ben. "Chiesi Sentenced to 30 Months in Galleon Case." DealBook Chiesi Sentenced to 30 Months in Galleon Case Comments. The New York Times, 20 July 2011. Web. 01 Mar. 2014. Rothfeld, Michael. "Gupta Gets Two Years for Leaking Inside Tips." The Wall Street Journal. Dow Jones & Company, 25 Oct. 2012. Web. 29 Mar. 2014. "Ship of Knaves." The Economist. The Economist Newspaper, 01 June 2013. Web. 01 Mar. 2014. Sumner, William Graham. "Greed Quotes." BrainyQuote. Xplore, n.d. Web. 27 Feb. 2014.

Show More
Related

  • Jordan Belfort Research Paper

    562 Words  | 2 Pages

    In conclusion, Jordon Belfort has had a major influence on today’s world. Belfort changed the way that people today see Wall Street and the world of stockbrokers. He lived at the top of the food chain but fell back to being “pond scum” (“The Wolf”). He even proved to all that a successful life isn't always the most perfect. Belfort served his time and is even a motivational speaker now. Now, Belfort is an example of how drastically one’s life can change within minutes, days, months, or

    Read More

  • Insider Trading: The United States V. Newman Case

    1106 Words  | 3 Pages

    The seriousness of insider trading was not brought to light until some time after the stock market crash of 1929. This specific event can be summed up as a day where many investors traded around 16 million shares

    Read More

  • An Analysis of the Relationship Between Corporate America and Wall Street in Liquidated by Karen Hos

    1083 Words  | 3 Pages

    In Karen Hos’ Liquidated, she aims to study the relationships between corporate America and the world’s greatest financial center. . . Wall Street. The. She puts all her three years of research in her ethnography and thus on the very first page of chapter one, we can already understand Hos’ determination to understand what Wall Street is all about. The first main theme explained is the relations on Wall Street that are based on a culture of domination of staff members, their irresponsibility dealing with corporate America, and constant changes that occur during this process.

    Read More

  • Martha Stewart Case

    973 Words  | 2 Pages

    In other words, its buying and selling of securities that has obtained non-public material information, and in Martha’s case she was guilty of it. “However in an interesting legal technicality, Martha Stewart did not necessarily breach a fiduciary duty to the other investors, since she had no real obligations to inform other investors, which would be the case if she were an officer with company (US SEC, 2009). This being said, if she confessed her actions were wrong, she would not have been convicted of insider trading. Insider trading can be either legal or illegal due to the nature and the timeframe. This was not the road that Martha Stewart decided to take. ‘She instead chose to collide with her broker in an attempt to barricade a story about how there was a standing order for Ms. Stewart to sell her shares” (US SEC, 2009). Martha Stewart had knowledge on the ethics surrounding trading of stock having already been a CEO, she should have known what she was doing, but one can argue that due to her crazy work life, she simply did no think about it. It shows that she is not engaging in illegal behavior. “Martha Stewart displayed her morality lies when lying to the US authorities even thought this was obviously illegal and unethical; her action can also be analyzed through egoism philosophy where right or acceptable behavior defined in terms of consequences to the individual, regarding maximizing self0interest” (Carr, 2002). Martha Stewart thought she did everything right, but still did not bother to warn the shareholders. If insider trading had not taken place, it would be less of a crime, but her actions indicated unethical behavior and define lack of integrity, and lying to Federal investigators only made it

    Read More

  • Conscience In The Great Gatsby By F. Scott Fitzgerald

    880 Words  | 2 Pages

    There are many instances of insider trading that have taken place in the U.S. stock exchange. The Federal Reserve and The Federal Government have clearly stated that insider trading undermines the law and is illegal, but individuals insider trade anyway.

    Read More

  • The Great Gatsby American Dream Failure

    810 Words  | 2 Pages

    Many businesses that achieve great success become greedy and want more. Pharmaceutical companies, such as Turing, have been overpricing life-saving drugs since they’ve been discovered. Martin Shkreli, the CEO of the company that raised the price of the H.I.V medicine, was arrested because of wrongdoings involving his former hedge fund and a pharmaceutical company he previously headed. He has been charged with conspiracy to commit security fraud, wire fraud, and using his previous company to cover personal debts. U.S. Attorney Robert Capers says, “As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company” (Shkreli).

    Read More

  • Transforming Your Paper into a Presentation

    1045 Words  | 3 Pages

    Preston, A. (2012). You eat what you kill: from scandal to catastrophe, the rise and fall of the investment bank. New Statesman, 141, 22

    Read More

  • Jordan Belfort: The Wolf of Wall Street

    1357 Words  | 3 Pages

    Jordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sexuality he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in restitution to any swindled stock buyers of his brokerage firm (A&E Networks Television). Though his lavish spending and berserk party lifestyle was consumed by excessive greed, he displayed both positive and negative aspects of business communications.

    Read More

  • Lack of Ethical Behavior in the Cases of Bernie Madoff and Enron

    669 Words  | 2 Pages

    In this essay, I will be examining the financial events surrounding Bernie Madoff, and the events surrounding Enron. Bernie Madoff, “a former American stock broker, investment advisor, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in the history of the world”. Bernard Madoff, 2011, para. 78. 1) Bernie was able to convince investors to give him large sums of money with the promise that they would receive between eight percent and twelve percent return a year.... ...

    Read More

  • Martha Stewart Case Study Summary

    1007 Words  | 3 Pages

    This case study is not about Ms. Stewart direct participation with illegal insider trading as the media had steered the public to believe. To begin, Ms. Stewart received a phone call from Ann Armstrong, her assistant, stating that Peter Bacanovic, her stockbroker, “thinks ImClone is going to start trading down.” (Arnold, Beauchamp, Bowie, 2013, p. 390) Although Ms. Stewart was not able to get a hold of Peter, she talked to his assistance, Douglas Faneuil,

    Read More

  • Jordan Belfort Case Study

    3181 Words  | 7 Pages

    The stock market is an enigma to the average individual, as they cannot fathom or predict what the stock market will do. Due to this lack of knowledge, investors typically rely on a knowledgeable individual who inspires the confidence that they can turn their investments into a profit. This trust allowed Jordan Belfort to convince individuals to buy inferior stocks with the belief that they were going to make a fortune, all while he became wealthy instead. Jordan Belfort, the self-titled “Wolf of Wall Street”, at the helm of Stratton Oakmont was investigated and subsequently indicted with twenty-two counts of securities fraud, stock manipulation, money laundering and obstruction of justice. He went to prison at the age of 36 for defrauding an estimated 100 million dollars from investors through his company (Belfort, 2009). Analyzing his history of offences, how individual and environmental factors influenced his decision-making, and why he desisted from crime following his prison sentence can be explained through rational choice theory.

    Read More

  • Insider trading

    614 Words  | 2 Pages

    But since the latter part of the 1960’s, stricter enforcement of insider trading practices has been put into place because of financial scandals. The first to be discussed is a concrete definition of “insider trading” as it is discussed in this essay. According to the “European Communities 1989 Insider Dealing Directive”, insider trading is the dealing on the basis of materials, unpublished, price-sensitive information possessed as a result of one’s employment. (Insider Trading)”     Ivan Boesky pleaded guilty to the biggest insider-trading scheme discovered by the United States Securities and Exchange Commission (SEC). He made $200 million by profiting from stock-price volatility in corporate mergers.

    Read More

  • Essay On The Enron Corporation Scandal

    2377 Words  | 5 Pages

    “When a company called Enron… ascends to the number seven spot on the Fortune 500 and then collapses in weeks into a smoking ruin, its stock worth pennies, its CEO, a confidante of presidents, more or less evaporated, there must be lessons in there somewhere.” - Daniel Henninger.

    Read More

  • The Wolf of Wall Street

    1300 Words  | 3 Pages

    Jordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sex, he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in restitution to any swindled stock buyers of his brokerage firm. Though his lavish spending and berserk party lifestyle was consumed by excessive greed, he displayed both positive and negative aspects of business communications.

    Read More

  • The Importance Of The Stock Market

    2323 Words  | 5 Pages

    Have you ever invested in the stock market? If so, do you know where your money is really going? The stock market is a risky business and it can make or break people’s lives. The stock market is used to daily to keep America on its trembling feet; it’s also being used at this very moment to cheat people out of money for personal gain. This happens every day in the stock market and its evolving rapidly, super computers that can trade faster than a blink of an eye, social media trends that can predict share values, and intricate stock market schemes that are getting harder and harder to find and take down. While the stock market keeps the world turning and the economy steady, the stock market is also being used in manipulative ways that are not always legal.

    Read More

More about The Galleon Case

Open Document