"Colleen, it's the biggest insider-trading case having to do with the hedge fund, specifically. And basically, what it is, is you also have at the top of the indictment, the 559th listed Forbes individual, who’s worth something like 1.3 billion dollars, that obviously gives it more media attention and scrutiny. But basically, it's an insider-trading case saying that material non-public information, information not available to the public, was traded on, which defrauds the markets, and defrauds the public. So, you know, it's a large case, but, the amount, certainly by the standards of the Madoff case, is not, you know, as big as that. But, they're describing it as the big case, so, you, but, you know…"

"Yea, so, we call it a big case, but you know, how big a surprise is this to you, because you know, when you’re talking about hedge fund, so money, so much money, is that at play. And, you know, one assumes the temptation is so large. I mean, look these managers aren't getting 37% returns for nothing, right?"

"I think you make a great point, Colleen, because the point is, they have lots of money under management, and people aren't necessarily calling for all of that money, all of the time, so of course, it's very very tempting to misappropriate the money. And the biggest surprise of all, though, and this was brought up in the introduction for the case, is that a wiretap was used. That's not that common in an insider-trading case. It's usually reserved for different areas of law organized crime, things like that. And I actually, had an occasion to look just very quickly at some of the quotes, you know, that are in the media, coming off of those wiretaps. Um, I mean, you know, that can be very very damaging, because those are the words of the people charged right out of their own maps, so, yea."

"Yeah, I wanna ask you more about the wiretap thing in a minute in the show, but you've already mentioned one of the world's richest man, we've been showing the picture of him. So I wanna bring that in now, may we can pop those pictures back up, but that person you mentioned is someone named Raj Rajaratnam. Now he is interesting, now these are just allegations at this point I wanna make sure. But he’s among the six executives busted. This guy, Raj, Rajaratnam, born in Sri Lanka, graduated from the Wharton School of Business, pretty prestigious school, right, runs a hedge fund at Galleon, a company that he started in the late 90s. Forbes Magazine put him at No.559 among the world's wealthiest billionaires. He’s got a net worth of what, 1.3 billion dollars and we've also learned that he contributed the money to President Obama's presidential campaign. I mean, I guess maybe that's the typical resume of a hedge fund manger, right?"

"Well, yeah, that and also the disappointing fact that in the recent period of the last year so, you know, you see Madoff was head of NASDAQ at one point, you see other prominent people, and becomes even more disappointing, Colleen, to see people who you would think have some modicum of creditability, um, you know, and wholesomeness, and you find them right in the middle of a very very intense set of you know, fraudulent facts. So that’s disappointing."

"I should mention too, he's got offices in California, China, Taiwan, India. He lives in New York, we'll quick, if you will, on the issue of the wiretaps."

"Sure."

"Um, is that gonna send a bit of chill for other hedge fund managers?"

"No, no, I think that's a good point I mean. Um, I think that may be part of the reason why law enforcement did that to say everybody is beyond notice now. While it’s unusual to get a wiretap in an insider-trading case, or securities fraud case, we're gonna do that. So I think we'll send the big message, I think that's right."

Vocabulary:

1. wiretap: the action of secretly listening to other people's telephone conversations, by connecting something to the wires of their telephone

2. Galleon: Gallen Group is one of the largest hedge funds in the world, which was founded by Raj Rajaratnam in 1997.