Stuart Slotnick, managing shareholder of Buchanan Ingersoll & Rooney's New York office, was quoted in a March 7, 2011 article by Bloomberg Businessweek. The piece was also picked up by the Washington Post and the Connecticut Post.
The article, "Rajaratnam Trial May Tarnish Goldman, McKinsey, Spark Suits," discussed the implications of Raj Rajaratnam's insider trading trial, jury selection for which is scheduled to begin today.
Rajaratnam, co-founder of the hedge fund management firm Galleon Group LLC, is accused of trading on insider information leaked from three dozen companies, including Morgan Stanley, International Business Machines Corp. and Moody's Investor Service.
The case, which headlines the largest U.S. crackdown on shady hedge fund dealings, will likely cast a pall over the companies involved in leaks, particularly as prosecutors seek to understand the circumstances under which the privileged information ended up with Rajaratnam.
It comes down to whether a single employee's lack of judgment is indicative of a larger, firm-wide disregard for federal regulations and trade secrets, Slotnick explained.
"It's unlikely a company would he held liable for the actions of a rogue individual unless it's shown the company knew or should have known about the disclosures or the company didn't take precautions," he said. "But in this country, if there's an accusation of wrongdoing, there will be a lawsuit."