After Preet Bharara, the attorney general for the Southern District of the state of New York, arrested Indian diplomat Devyani Khobragade in December, some people suggested that he was on a mission to put people of Indian origin behind bars.
Bharara had, after all, also led the conviction of Rajat Gupta, a financier who was the former chief executive of McKinsey and Company, for insider trading. As for Khobragade, she was eventually expelled from the US after allegations that she had mistreated Sangeeta Richard, her domestic worker, and not paid her the minimum wage mandated by US law.
Since Bharara became attorney general in 2009, he has led a crackdown on corruption and insider trading on Wall Street, with a 100 per cent conviction rate for his insider trading cases. Many of those prosecuted and convicted were Indians, said his critics.
“That may be the impression in the Indian press and nowhere else,” said James Margolin, chief public information officer with Bharara’s office. “The US attorney’s office in New York does not target Indians or any other group or individual. The office prosecutes people for whom there is evidence of criminal conduct.”
In the US, the district attorney represents the government in the prosecution of criminal offences in a particular region. The district attorney with jurisdiction over New York city is particularly powerful because the metropolis is the hub of the financial industry and has a huge concentration of movers and shakers.
It is true therefore that those with political ambitions have an incentive to use their stints as district attorney to focus on high-profile cases that will get them media attention.
But only ten of the 89 cases of insider trading involved people of Indian origin, including that of Rajat Gupta, former director of investment banking firm Goldman Sachs, according to Bharara’s office. This constitutes 11 per cent of all his insider trading prosecutions. Six of these cases, including Gupta's, were related to the Galleon Group LLC hedge fund scandal.
This percentage is not unusually high because it roughly reflects the proportion of Indians in senior positions on Wall Street. To cite just one example, of the 280 people that Goldman Sachs appointed to the position of managing director starting from 2014, at least 25 were of Indian origin.
Bharara's investigation revealed that top executives in finance firms had for several years been passing on confidential information to Galleon founder Raj Rajaratnam, a person of Sri Lankan origin. Of the remaining four involving people of Indian origin, two were on for insider trading related to Yahoo!, one to Dell and one was a wires and security fraud.
Several people who were not of Indian origin were also prosecuted in these cases. “Many cases are important,” said Margolin. “It would be difficult to say which cases are our most important cases, but the cases you mention [Rajat Gupta, Devyani Khobragade] are not nearly the most high-profile cases to people in New York or the United States.”
“A very small percentage of defendants in cases brought by this office happen to be Indian or of Indian descent, but their ethnicity or national origin has nothing to do with why they are prosecuted,” he said. He also noted that the US Attorney did not “suggest charges or decide to bring them.” Cases, he pointed out, are investigated and brought by law enforcement agents working with the attorney’s office.
Anita Raghavan, author of The Billionaire's Apprentice, a book on Gupta and Rajaratnam, says the numbers reflect how insider trading works. “You would only swap corporate secrets with your closest associates and, in the Galleon case, it was clear that Indians and South Asians broadly were among Rajaratnam's intimate circle,” she said.
“As prosecutors yanked at the threads in the Galleon case, they kept stumbling upon more South Asians, which is only natural because it was this group that constituted Rajaratnam's core circle of tippers," she said. “Bharara joined the US attorney's office in Manhattan in August 2009 and the Galleon case [that led to the prosecution of several Indians] was brought that October. It had been in the making for three years so it would be hard to argue that Bharara was responsible for it.”
Indians today form a sizeable number of those in positions of power in the financial industry based around Wall Street. “As Indian immigration to the United States started to swell in the 1980s, you began to see more Indians working on Wall Street, which until then had been a bastion of white males,” said Raghavan. “Men like Vikram Pandit, Anshu Jain and, of course, the ringleader in the Galleon case, Raj Rajaratnam, all joined the securities industry in the 1980s.”
While Indians were not necessarily solely responsible for Wall Street’s success or devastating fall in 2008 — that credit at least is shared — it became inevitable that they would be among those prosecuted in its aftermath.
“It is hard to imagine the volume of money made without insider trading schemes,” said Vijay Prashad, author and professor of South Asian history at Trinity College, Connecticut. “The collapse of the credit market shone a light into this industry briefly, and so did the indictments, before the market began to pick up and the light drifted away. If the light had lingered longer, there would be many more Indian Americans in Preet's claw.”
“Bharara is certainly a more polarizing figure in the Indian community than Gupta, but that's not surprising," said Raghavan. "Gupta was viewed as a friend and supporter of India and Indians. Bharara – fairly or unfairly – is believed to be hostile to Indians.
Said Prashad, “This tells you a little about the way race functions in the US. Every Indian stands in for the entire community. If one is guilty, we all are. Conversely, if one wins the spelling bee or becomes head of Microsoft — things that are seen as worthwhile in the mainstream — everyone feels a winner.”
What is curious is why Bharara, who is so celebrated in the US for his firm stand on corruption and anti-terrorism, is not more palatable to Indians, who tend to celebrate the victories of people whose roots are in the sub-continent.
This, Prashad thinks, has a simple reason. “Capitalism applauds those who make money not those who abjure it for higher alignments.”
Bharara had, after all, also led the conviction of Rajat Gupta, a financier who was the former chief executive of McKinsey and Company, for insider trading. As for Khobragade, she was eventually expelled from the US after allegations that she had mistreated Sangeeta Richard, her domestic worker, and not paid her the minimum wage mandated by US law.
Since Bharara became attorney general in 2009, he has led a crackdown on corruption and insider trading on Wall Street, with a 100 per cent conviction rate for his insider trading cases. Many of those prosecuted and convicted were Indians, said his critics.
“That may be the impression in the Indian press and nowhere else,” said James Margolin, chief public information officer with Bharara’s office. “The US attorney’s office in New York does not target Indians or any other group or individual. The office prosecutes people for whom there is evidence of criminal conduct.”
In the US, the district attorney represents the government in the prosecution of criminal offences in a particular region. The district attorney with jurisdiction over New York city is particularly powerful because the metropolis is the hub of the financial industry and has a huge concentration of movers and shakers.
It is true therefore that those with political ambitions have an incentive to use their stints as district attorney to focus on high-profile cases that will get them media attention.
But only ten of the 89 cases of insider trading involved people of Indian origin, including that of Rajat Gupta, former director of investment banking firm Goldman Sachs, according to Bharara’s office. This constitutes 11 per cent of all his insider trading prosecutions. Six of these cases, including Gupta's, were related to the Galleon Group LLC hedge fund scandal.
This percentage is not unusually high because it roughly reflects the proportion of Indians in senior positions on Wall Street. To cite just one example, of the 280 people that Goldman Sachs appointed to the position of managing director starting from 2014, at least 25 were of Indian origin.
Bharara's investigation revealed that top executives in finance firms had for several years been passing on confidential information to Galleon founder Raj Rajaratnam, a person of Sri Lankan origin. Of the remaining four involving people of Indian origin, two were on for insider trading related to Yahoo!, one to Dell and one was a wires and security fraud.
Several people who were not of Indian origin were also prosecuted in these cases. “Many cases are important,” said Margolin. “It would be difficult to say which cases are our most important cases, but the cases you mention [Rajat Gupta, Devyani Khobragade] are not nearly the most high-profile cases to people in New York or the United States.”
“A very small percentage of defendants in cases brought by this office happen to be Indian or of Indian descent, but their ethnicity or national origin has nothing to do with why they are prosecuted,” he said. He also noted that the US Attorney did not “suggest charges or decide to bring them.” Cases, he pointed out, are investigated and brought by law enforcement agents working with the attorney’s office.
Anita Raghavan, author of The Billionaire's Apprentice, a book on Gupta and Rajaratnam, says the numbers reflect how insider trading works. “You would only swap corporate secrets with your closest associates and, in the Galleon case, it was clear that Indians and South Asians broadly were among Rajaratnam's intimate circle,” she said.
“As prosecutors yanked at the threads in the Galleon case, they kept stumbling upon more South Asians, which is only natural because it was this group that constituted Rajaratnam's core circle of tippers," she said. “Bharara joined the US attorney's office in Manhattan in August 2009 and the Galleon case [that led to the prosecution of several Indians] was brought that October. It had been in the making for three years so it would be hard to argue that Bharara was responsible for it.”
Indians today form a sizeable number of those in positions of power in the financial industry based around Wall Street. “As Indian immigration to the United States started to swell in the 1980s, you began to see more Indians working on Wall Street, which until then had been a bastion of white males,” said Raghavan. “Men like Vikram Pandit, Anshu Jain and, of course, the ringleader in the Galleon case, Raj Rajaratnam, all joined the securities industry in the 1980s.”
While Indians were not necessarily solely responsible for Wall Street’s success or devastating fall in 2008 — that credit at least is shared — it became inevitable that they would be among those prosecuted in its aftermath.
“It is hard to imagine the volume of money made without insider trading schemes,” said Vijay Prashad, author and professor of South Asian history at Trinity College, Connecticut. “The collapse of the credit market shone a light into this industry briefly, and so did the indictments, before the market began to pick up and the light drifted away. If the light had lingered longer, there would be many more Indian Americans in Preet's claw.”
“Bharara is certainly a more polarizing figure in the Indian community than Gupta, but that's not surprising," said Raghavan. "Gupta was viewed as a friend and supporter of India and Indians. Bharara – fairly or unfairly – is believed to be hostile to Indians.
Said Prashad, “This tells you a little about the way race functions in the US. Every Indian stands in for the entire community. If one is guilty, we all are. Conversely, if one wins the spelling bee or becomes head of Microsoft — things that are seen as worthwhile in the mainstream — everyone feels a winner.”
What is curious is why Bharara, who is so celebrated in the US for his firm stand on corruption and anti-terrorism, is not more palatable to Indians, who tend to celebrate the victories of people whose roots are in the sub-continent.
This, Prashad thinks, has a simple reason. “Capitalism applauds those who make money not those who abjure it for higher alignments.”
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