Review of “Billionaire’s Apprentice”
Fat cat financial felon Raj Rajaratnam is enjoying a cushy prison cell with a personal “manservant” at his beck and call. The billionaire former hedge fund manager and co-founder of financial giant Galleon, is serving an 11-year prison sentence after being convicted for insider trading in one of the biggest white collar fraud cases in history. The investigation, and the crime itself is detailed in “Billionaire’s Apprentice” by Anita Raghavan, a former reporter for the Wall Street Journal and now at Forbes.
During the investigation, the United States government resorts to using wiretaps to corner the crooks, whose crime would have been impossible to prove with circumstantial evidence alone.
The scheme involves a number of influential players, all with their own role to play. Rajaratnam, a Sri Lankan native, uses his charm and gregarious nature to develop an extensive network of insiders in the corporate world. One learns about the rampant sharing of ideas within the hedge fund community. Insiders at companies feel obliged to help Rajaratnam as a quid pro quo for help he has extended to them.
Anil Kumar, a McKinsey consultant, connives an elaborate payment scheme to receive money from Galleon to an account in the name of his housekeeper. He violates the trust placed by companies such as Advanced Micro Devices by sharing confidential information with Rajaratnam. Danielle Chiesi, the former beauty queen, provides glamour as she uses her sexual prowess to extract vital information and pass it on to the Galleon chief. However, one perplexing angle in the book is that of Rajat Gupta, the former head of McKinsey. Why does he, as a board member of Goldman Sachs, tip Rajaratnam? It’s clearly not about money. While sentencing Gupta, Judge Rakoff provides insight into this by revealing that he views it as “an avenue to future benefits, opportunities and even excitement”. The judge adds that “Gupta’s tipping off Rajaratnam to the $5 billion investment by Warren Buffett was the functional equivalent of stabbing Goldman in the back”.
“Billionaire’s Apprentice” also raises important social issues. The author talks about money and wealth being a yardstick of success in the financial industry. The only thing common between the billionaire Rajaratnam and his several apprentices is their greed. It also highlights that the Indian community in the United States that has risen through the ranks and enjoyed an impressive reputation gets a rude setback with the arrest of Gupta. Fittingly, two of the most dogged investigators to unravel the crime also come from the ethnic community, Sanjay Wadhwa, the deputy chief at the Securities and Exchange Commission’s Market Abuse Unit and Preet Bharara, the U.S. Attorney for the Southern District of New York.