raj rajaratnam had it all -- a wildly successful hedge fund, billions in the bank, and the respect of wall street. >> raj was a competitor first. he wanted to win. he wanted to win every day. >> narrator: but behind closed doors, rajaratnam was gaming the system -- to the tune of $75 million dollars. >> inside trading became his business model. >> narrator: and each time rajaratnam's phone is ringing, the feds are listening. and ultimately, it's his own voice that will seal his fate. >> it's kind of like taking a bite out of the forbidden fruit, except for here he was feasting on the forbidden fruit. >> narrator: in january of 2008, raj rajaratnam is the head of a $7 billion hedge fund called galleon group. his fund is generating stellar returns for investors, and rajaratnam's phone is ringing off the hook. many of the calls are from corporate insiders providing a gold mine of market-moving information. on july 24th, just after 9:00 p.m., rajaratnam takes a call from danielle chiesi. the former beauty queen is now a hedge-fund trader and one of rajaratnam's best sources. chiesi has th

raj rajaratnam. we believe in mr. gupta's innocence. we continue to believe in mr.ta's innocence on these charges and continue to fight for his innocence. he's an honorable man. >> will you appeal? >> this is round one. judge allowed us to make motions, which we'll make with him. if they don't prevail, obviously we'll appeal. >> what did mr. gupta say? >> i think i've said everything i've i'm going to say. thanks for your courtesies. >> the inference from gary naftalis, there will be an appeal. let's get back to southwest airlines falling after traffic declined over 2% compared to the same period last year. b.k. >> no love here especially for the whole airline industry you're starting to see traffic numbers decline. across the ocean traffic is declining, latin america is declining. it's not just domestic. airlines have always been a tough trade. i don't think they are getting any better now. stay away. >> let's not forget, guys, today's quadruple, they all expire. i assume you'll get volatility later in the day towards the end? >> yes, simon. you'll also get an exte

raj rajaratnam, as you know, serving an 11 sentence.pect? >> well, that's hard to tell without looking at a very substantial decision, probation report. the judge isn't going to simply focus on the statutory geithner lines sentence. those guidelines are no longer mandatory. the judge is a thoughtful and careful judge and he'll make look at a lot of different factors before he decides what is an appropriate sentence in the case. he'll consider the defendant's background and other things that he's done in his life as well as the crimes of which he's been convicted. >> you're no longer on the bench, you might be more free to speak about something like this. the incremental impact on a goldman or mckinsey, proctor, once used the services. are they any worse for the wear because of the verdict? >> it has had an impact on mckinsey because they make a living conferring with their clients on highly sensitive information. they are unfortunately in the situation where a former chairman has done precisely what he shouldn't have done, although it a

what's interesting is jurors never heard a tape of gupta tipping off raj rajaratnam but heard raj rajaratnam talking about having been tipped off. that the defense had fought hard to keep out of this case. the jurors said while it wasn't the key evidence, it was strong corroborating evidence. they believe that the prosecution really laid out the details very well but the defense attorney says he will be appealing on that front. brian, as the family cried as the verdict was read, the jurors said they were moved themselves. they did like the defendant and wanted to find him innocent but they found the evidence overwhelming. >> yeah. i saw that one juror talked about him being a family man. thank you very much. gupta is a big story but here, mary, it's secondary. yesterday, we knew short covering was a huge part of it. >> right. >> today we're up. and it's a bit of a head scratch tore a lot of people. >> well, you know, the feeling is that there are hopes for stimulus are at least some signci stimulant of it and driving that was the disappointing data received earlier today. empire state indust

just ask hedge fund manager raj rajaratnam, who recently got 11 years in prison for doing it.ongressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it. >> schweizer: we know that, during the healthcare debate, people were trading healthcare stocks. we know that, during the financial crisis of 2008, they were getting out of the market before the rest of america really knew what was going on. >> kroft: in mid-september 2008, with the dow jones industrial average still above 10,000, treasury secretary hank paulson and federal reserve chairman ben bernanke were holding closed door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. one of those attending was alabama representative spencer bachus, then the ranking republican member on the house financial services committee, and now its chairman. >> schweizer: these meetings were so sensitive

charges that he leaked inside information about the bank to you now imprisoned hedge fund manager raj rajaratnam about that stake that warren buffett took in the company. >> paul volcker says the trading loss may show the large heest b are too big to manage. the so-called volcker rule would ban banks from making speculative bets with hair own funds if they enjoy federal guarantees. >> in news out of washington, harry reid making a new offer on student loans. unless an agreement is reached, the interest rate set to double on july 1st. he suggested proposed changes in plans be used to cover the cost of sfwending the -- >> why are you saying this so we weekly? >> because you're either eeatini want the camera to -- >> i'm very interested in stupt lo student loans. >> i got you to talk anyway with a mouthful. >> nobody was able to see. >> if i got this done quick enough, would you have had to read the next story. >> senate republican leadership aide says the propose would be reviewed and that it may represent -- >> you talked so long that they -- >> so it was supposed to be you. >> the floor is yours