By Kit R. Roane
Raj Rajaratnam ran what might be described most delicately as an outlier strategy: trading on insider information, which is not only illegal but impossible to pull off consistently year after year. And in terms of wooing coveted investors, even the most desperate endowment or pension fund would find it a difficult strategy to embrace.
||Illustrations by Brian Cronin|
With several other hedge fund managers and traders ensnared in the insider trading scandal, Rajaratnam’s Galleon Group epitomizes hedge funds as far as the greater public is concerned—sitting with Bernard Madoff, Amaranth Advisors and Long-Term Capital Management in the hedge fund industry’s hall of shame. It doesn’t appear to be the end of the bad news either. The Securities and Exchange Commission and congressional investigators—now reportedly focusing on trades made at SAC Capital Advisors—seem to be gaining steam every day....