ECONOMY - How Players on Wall Street Cheat the Casino

Note, I use the term "casino" because Wall Street Stock Exchange IS one of the world's biggest gambling casinos. Players place "bets" on stock in hopes the value goes up on the "next spin of the wheel."

"Galleon Chief’s Web of Friends Proved Crucial to Scheme" by PETER LATTMAN and AZAM AHMED, New York Times 5/11/2011

Excerpt

As Raj Rajaratnam and Anil Kumar, a McKinsey consultant, walked out of a fund-raiser in Manhattan, Mr. Rajaratnam pulled his old friend aside and made him an offer: would Mr. Kumar provide him with insights for $500,000 a year?

“You have such good knowledge that is worth a lot of money to me,” he said, according to Mr. Kumar.

Mr. Kumar faced an agonizing choice. His employer barred its executives from outside consulting, but an extra half-million dollars a year — and the chance to do business with a powerful hedge fund manager — was tantalizing.

Weeks later, Mr. Kumar accepted.

That deal, struck on an autumn evening in 2003, was one of the many connections made by Mr. Rajaratnam over the years that gave him access to the inner secrets of dozens of publicly traded companies. His vast Rolodex of tipsters included former business school classmates, fellow hedge fund traders and technology industry executives whose origins, like his, were from the Indian subcontinent.

In many respects, Mr. Rajaratnam was no different from the thousands of Wall Street stock pickers who diligently network with corporate executives and industry experts to gain an investment edge. But Mr. Rajaratnam, a 53-year-old Sri Lankan native, sought out information that was confidential, beyond the reach of research, and illegally traded on it, a jury in Federal District Court in Manhattan found on Wednesday, convicting him on all 14 counts of securities fraud and conspiracy.