Free Press Journal

The Billionaire’s Apprentice

book review

This book is a an engaging non-fiction book that covers the famous Rajaratnam-Gupta insider trading case, and     analysis the South Asian background of these two men.

The Billionaire’s Apprentice
Anita Raghavan
Published by Hatchette
Pages: 493;
Price: Rs 499/-

Anita Raghavan is a reporter who spent 18 years at The Wall Street Journal and contributed to The New York Times DealBook. She has gone through mounds of documents, testimony, and conducted more than 200 interviews on three continents for this true-life business thriller, “The Billionaire’s Apprentice.” It is distinguished by meticulous reporting and instructive minutiae.

Raj Rajaratnam and Rajat Gupta were two of the most admired business luminaries from the “twice blessed” generation of South Asian immigrants, born after 1947. Like many top students at the time, they sought graduate business degrees: Rajaratnam at the Wharton and Gupta in Harvard.

Rajaratnam founded the Galleon Group hedge fund and became a billionaire, and was considered the richest Sri Lankan-born person in the world. Gupta rose within McKinsey & Company to become the elite consulting firm’s three-term leader and the first Indian-born chief executive of a multinational company. Both were rich and reputable, members of exclusive social and business circles. Rajaratnam was dedicated to helping victims of land mines; Gupta presided over global efforts to fight AIDS, tuberculosis and malaria.

There was absolutely no need for the duo to indulge in insider trading. Yet Juries convicted them of securities fraud. Rajaratnam had been given insider tips and used this advantage to make millions of dollars trading shares. Gupta was one of his sources. Rajaratnam received an 11-year sentence, the longest in American insider trading history; Gupta got two years.

The cases against these two men are the foundation this taut thriller, we get lot of gossip about the bit players. Raghavan’s coverage is encyclopaedic. The details of the two cases enshrine “the rise of the Indian-American elite.”

It took time and hard work for this new generation of South Asians to penetrate American financial firms. Rajaratnam was the only Sri Lankan in his class at Wharton, and Gupta had perfect grades after his first term at Harvard but couldn’t get a job. The barriers fell slowly. As finance became more mathematical, Wall Street firms began to hire skilled graduates, mostly men, from the ultra-competitive Indian Institutes of Technology, which were run as pure meritocracies.

Indian-Americans play a large role in this book. Preet Bharara oversaw both trials on behalf of Government. Sanjay Wadhwa, assisted the enquiry. On the private sector side, Rajaratnam created a South Asian network of tipsters and rogues noted for debauchery. Rajaratnam offered thousands of dollars to anyone who could finish 10 tequila shots in a row or eat an entire loaf of bread without taking a drink of water. The alcohol, drugs and locker room antics are worthy of a Hollywood movie.

Anil Kumar , another successful Indian immigrant who was from  Wharton with Rajaratnam and  Gupta’s protégé at McKinsey was the government’s star witness, explaining how Rajaratnam wired money to an offshore bank account in the name of Kumar’s housekeeper in exchange for inside information — as much as a million dollars for one tip. Kumar also testified against Gupta, his long time friend and mentor.

Gupta — once a “corporate rock star,” fell further than anyone, from the boards of Goldman Sachs, Procter & Gamble, American Airlines and numerous nonprofits. The book raises important policy issues. Federal prosecutors frequently use wiretaps to target street crime and terrorism, but this trial was the first time the government employed on-tape conversations to prove insider trading. Without the wiretaps the cases against both men probably would have failed. But the use of wiretaps in prosecutions of financial crime is contested territory; Rajaratnam’s lawyers asked a court to set aside his conviction, arguing that the wiretaps violated his constitutional right to privacy.

Today, every aspect of finance — even insider trading and its prosecution — requires greater technical skills than it did in the past. One question that the scandal raised was: Are South Asians inherently dishonest? Raghavan makes it a point to stress that in the Galleon case South Asians were on both sides of the law.

This book is a rich, dramatic tale full of fascinating characters and interesting plot twists. Rajat Gupta, Anil Kumar, Roomy Khan and Rajaratnam form a deadly mixture. The biggest insider trading case of this generation has been transformed into an

un-put-downable roller-coaster of a book.

P.P. Ramachandran