McKinsey & Co., a prestigious consulting firm helps clients improve their performance by analyzing confidential data on sales, growth and performance. In a press release the U. S. Attorney's office wrote "Kumar obtained inside information regarding certain of McKinsey's clients, including AMD, and communicated it to Rajaratnam in violation of duties of trust and confidence Kumar owed to McKinsey and its clients."
The government was able to make its case with the help of a cooperating witness and as Rajaratnam allegedly took calls and instant messages with illegal stock information, the government was listening in and recording.
"We've seen a new enforcement tool used, for the first time the government had engaged -- or acknowledged engaging -- in a sustained use of wire taps. That has to have people sweating all over Wall Street," said Coffee.
"I just want to focus on my salad." -- Martha Stewart, when asked about insider trading accusations during a cooking segment on "The CBS Early Show."
Business mogul, talk show host and lifestyle expert Martha Stewart has her own line of furniture, home goods and a national magazine. But in 2002, the media magnate came under scrutiny for selling nearly 4,000 shares of ImClone stock right before the company announced it did not get Food and Drug Administration approval for a cancer drug. The announcement by ImClone sent its stock plummeting but not before Stewart sold off her stake.
On July 16, 2004, Stewart was found guilty for lying to investigators about the sale, conspiracy and obstruction of justice. Stewart reported to federal prison camp in West Virginia Oct. 8, 2004, and served her five-month sentence.
In 2006, Martha Stewart settled the insider trading civil suit brought against her by the Securities and Exchange Commission. Stewart agreed to pay $195,000, three times the amount of money she would have lost had she not sold the ImClone stock.
"Well, now I'm screwed. I can't sell." -- Mark Cuban, according to the Securities Exchange Commission, during a 2004 conversation with the CEO of Mama.com.
Billionaire Mark Cuban is embroiled in an ongoing battle with the Securities and Exchange Commission over his 2004 sale of Mama.com stock. According to a lawsuit filed by the SEC last November, in 2004 Cuban avoided losing $750,000 by selling his stake in the company after learning confidential information from the site's CEO.
The SEC's case was dismissed this summer by a federal judge but earlier this month, the agency filed an appeal and is now taking their case in the U. S. District Court in Dallas.
Mark Cuban owns the NBA Dallas Mavericks team along with HD Net TV.
Jeff Skilling led Enron through the company's meteoric rise, and later its rapid decline. Skilling abruptly resigned as CEO of Enron Aug. 14, 2001. By December of that year Enron went bankrupt but not before Skilling sold nearly $60 million worth of shares in the company. Skilling was later charged with lying to investors and government regulators about the company's financial losses and insider trading. Skilling was convicted in 2006 and is currently serving a nearly 25-year sentence in a Littleton, Colo., federal correctional institution.