)
The story unfolded like a thriller - larger-than-life characters, sky-high stakes, cryptic messages, frenzied stock trades and the law finally catching up. Even if ordinary Americans had yet to wake up to the growing emergence in recent years of Indians and south Asians in their country as high-achieving professionals, the Wall Street scandal starring Sri Lankan billionaire hedge fund manager Raj Rajaratnam and blue-chip business icon Rajat Gupta, along with a network of other Indian informants, certainly caught their attention. The 2009 case brought down Rajaratnam's Galleon Group, one of the world's biggest hedge funds, and marked the first time telephone wire taps were used to investigate insider trading.
Anita Raghavan, 49, a former reporter for The Wall Street Journal, and currently a London-based contributor to Forbes and The New York Times' DealBook, has said many Indian Americans were concerned that the account of the scandal in her book, The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund, could tarnish the image of the community. But they were overlooking the fact that the law enforcement officials on the case - Sanjay Wadhwa, assistant regional director at the New York office of the Securities and Exchange Commission, and Preet Bharara, US Attorney for the Southern District of New York - were also from the same community. This was a drama with an all-star Indian American cast.
The book's subtitle suggests a broader look at the Indian American community, but the narrative is primarily focused on the Galleon scandal, which culminated with Rajaratnam's conviction in May 2011 and Gupta's in June 2012. (On Monday, a US federal appeals court upheld Rajaratnam's conviction. The 56-year-old trader is serving an 11-year prison sentence. Gupta, 64, has also appealed his conviction. He was sentenced to two years in prison but is free pending appeal.)
Drawing extensively on material from the US investigation into the insider trading operation, her own reporting of the story, other media reports and interviews conducted for the book, Raghavan lays out the conspiracy and the investigation that felled it in exhaustive detail. She reconstructs scenarios and conversations using wiretaps, transcripts, court documents, testimony and recollections of sources. That might sound dry but the book is a page-turner with conversations, lending the narrative an almost film-like quality.
Wall Street stories typically make for fascinating reading, the seeming intensity or nonchalance with which their subjects make or lose millions never failing to thrill. An account of busted billionaires has the added element of schadenfreude.
That's not the principal emotion, however, that the book evokes for its title character, former McKinsey Managing Director and Indian corporate idol Rajat Gupta. Raghavan gives readers a deep look into Gupta's life, from his early years, covering the time he lost both parents while still a teenager, his determination to care for his siblings, his academic achievements at IIT Delhi and Harvard Business School and his steady rise to the top of the prestigious consulting firm McKinsey, making him one of the first Indians to head a major global firm. He was also on the board of blue-chip American companies including Goldman Sachs and Procter & Gamble. Also noted are Gupta's tireless philanthropic and mentoring initiatives. As Judge Jed Rakoff said during Gupta's sentencing, "The Court can say without exaggeration that it has never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their time of need." Yet the judge noted that Gupta's character did not diminish his offence. His disclosure to Rajaratnam of Warren Buffett's $5-billion investment in Goldman Sachs was "the functional equivalent of stabbing Goldman in the back".
Raghavan admits her portrayal of Gupta is sympathetic and says his background influenced her outlook. "I realised that I, and maybe many readers, could not have any sense of what it would be like to be a 16-year-old and to lose both your parents, and to be in a family that was not very wealthy. He really had to struggle in his early life in a way that I didn't. So before I judged him I wanted to keep that in mind," she says in an interview from New York.
The author also travelled to Kolkata in early 2011, before Gupta was indicted, to learn more about his family, especially his father Ashwini Gupta, a freedom fighter and journalist. Raghavan said this angle appealed to her due to the background of her own family from Kerala. Her greataunt was the famous Captain Lakshmi, of Netaji's Indian National Army and later a member of the CPI(M) who died last year.
Rajaratnam gets a decidedly less sympathetic portrayal. The Sri Lankan Tamil hedge fund manager, whose family fled a budding civil war in his native country, comes across as a blustering, loud billionaire, frequently berating staff and fellow investors. In one instance, Gupta's friend and investor Ravi Trehan walks out of a meeting with Rajaratnam and their venture, Voyager Capital Partners, after being abused. There is an account of a junior female employee at Galleon who was asked to model a spandex outfit from yoga apparel company Lululemon at a meeting. Rajaratnam would often hold job interviews at a topless club. Over cocktails at an upscale French restaurant in New York, Rajaratnam tells clients "his idea of a good time was to get a few girls on his lap and spank them".
There are also accounts of his apparent generosity. Intel Treasury executive Rajiv Goel, who was one of Rajaratnam's tipsters, is stunned when his friend and Wharton classmate wires $500,000 to help during a family crisis. Rajaratnam cut a $1 million cheque to the Indian School of Business, Gupta's brainchild.
Another key character is Anil Kumar, also a Wharton classmate of Rajaratnam's and a McKinsey consultant, who was a star witness against his one-time friend and was let off with probation in return. Kumar fancies himself too polished for Rajaratnam but isn't above accepting money for insider tips in the name of his Indian maid who was living with his family in Silicon Valley and trying to falsify her documents to prove she was living in India.
The author also interviewed Jeffrey Skilling, the former CEO of Enron, now in prison for his role in the collapse of the energy giant. "When I found out Skilling was at McKinsey at the same time as Rajat, I wrote him a letter and a week later he got in touch through the prison email system," says Raghavan, adding that Skilling was a "wonderful writer" and "gave eloquence" to the book. Earlier this month, Skilling, who was sentenced to more than 24 years in 2006, had his sentence reduced to 14 years. Indian readers, of course, will recall that Enron was a major Indian scandal before it became a major American scandal.
Rajaratnam had built a vast network of tipsters in the tech sector, and many of them, at least the ones that figure in the investigation, are Indian. Raghavan believes the subcontinental connection could have been a factor in Gupta's downfall. "I think Raj was able to break down his barriers in a way that someone in a similar position who had been American or Caucasian wouldn't have," she says, adding, "I saw Raj as Iago to Rajat's Othello."
On the other side of the investigation, the equation between two prominent Indian Americans, prosecutor Bharara, and SEC official Wadhwa, was not without its share of tensions. Wadhwa, whose team had laboured through the initial investigation and was working on bringing a civil action, was not pleased at the thought of Bharara muscling in on their hard work. Indeed, most of the publicity before and after the trials went to Bharara, even though most of the case had been built before he became the US Attorney.
The 400-plus page account is riveting but not without error - Rajiv Gandhi is described as the "prime minister of India from 1984 until he was assassinated in 1991", though his Congress government was voted out of power in 1989.
The big picture that emerges is that of a community that has insinuated itself into the fabric of American life, including its scandals. Next time, the community could even add another dimension to the cast - this time on the bench, with Sri Srinivasan recently becoming the first Indian American to join a federal appeals court.
THE BILLIONAIRE'S APPRENTICE: THE RISE OF THE INDIAN-AMERICAN ELITE AND THE FALL OF THE GALLEON HEDGE FUND
Author: Anita Raghavan
Publisher: Hachette
Pages: 512
Price: Rs 499
