Business: The rise and fall of the Greedy insider
The Billionaire’s Apprentice By Anita Raghavan
THE Galleon Group insider-trading scandal involving Raj Rajaratnam and Rajat Gupta featured arrogance, greed and, ultimately, prosecution.
To Anita Raghavan, whose rivetting new book tells the story in meticulous detail, that's a sign that Indian-Americans have finally arrived.
"The South Asian diaspora in the US had enjoyed unrivaled success," she writes in 'The Billionaire's Apprentice'. "Its members were considered the new 'model minority'."
The apprentice of the title is Gupta, who rose to head global consulting firm McKinseys as a consummate politician and paragon of discretion. Yet when he stepped down, he became eager to transcend mere wealth and achieve mega-riches.
To that end, he threw in his lot with Rajaratnam, a boorish hedge-fund manager of Sri Lankan birth whose success was due, in part, to a network of South Asian contacts in Silicon Valley and elsewhere. Gupta was on the board of Goldman Sachs and sometimes within minutes of leaving a confidential meeting he would telephone Rajaratnam.
The two men were partners in a separate fund but Gupta doesn't appear to have directly profited from any of his friend's Goldman trades, which helped earn both prison sentences. (Gupta is currently free while he appeals his conviction.)
Perhaps Gupta expected to profit from maintaining a good relationship with Rajaratnam; prosecutors introduced evidence that Gupta was negotiating for a stake of about 15pc in an entity called Galleon International, a $1.3bn (€977m) Asian investment vehicle.
Raghavan's tale is enlivened by a wealth of detail. We learn Gupta had at least 13 phones and Rajaratnam held job interviews at a topless club.
The author's Herculean labours spanned three continents, and she benefited as well from the wiretaps used by prosecutors to nail Rajaratnam.
The book provides a glimpse into a supremely successful immigrant group. Their arrival was well-timed, notes Raghavan. The civil-rights revolution opened doors to non-white talent, and the US economy's new emphasis on finance and technology suited the training of these newcomers.
Eventually Rajaratnam and Gupta were prosecuted.
If the book has weaknesses, they are mostly side effects of its strengths. It's an excellent work of journalism, but Raghavan is no great prose stylist – towards the end she refers redundantly to "a pivotal turning point" – and in some places readers must forge ahead snow-blind from the blizzard of details.
A larger failing is that while the book is long on facts, it's a tad short on analysis. Raghavan is unable to provide much insight into what makes the major players tick.
Years before his downfall, Gupta gave a lecture at Columbia University and said: "Yeah, I am driven by money. However much you say that you will not fall into the trap of it, you do fall into the trap of it." One hopes the students were listening.
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