Lessons learned from Raj Rajaratnam's conviction on 14 counts of conspiracy and securities fraud?

"One, do not engage in insider trading," said Joseph Grundfest, a former commissioner on the Securities and Exchange Commission, now a professor of law and business at Stanford University. "Two, if you do, don't get caught on wiretaps testifying against yourself."

Implications?

"I expect to see more charges and other high-profile cases very soon," said Jacob Frenkel, a former Justice Department prosecutor and SEC counsel who is now in private practice in Maryland. "This clean-sweep verdict gives federal prosecutors the confidence that senior Wall Street and Silicon Valley professionals are fair game for prosecution."

Wednesday's verdict against the Galleon Group hedge fund CEO, who faces up to 19 1/2 years in prison, marks a major milestone in one of the biggest insider-trading cases in recent history, but it is far from over.

More than 40 people face criminal charges or civil lawsuits or have pleaded guilty in the investigation so far. Three former Galleon Group traders are scheduled to stand trial Monday.

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Meanwhile, prosecutors are looking into the doings of other hedge funds on Wall Street as well as a so-called expert network, Primary Global Research in Mountain View.

"This verdict will increase (the government's) bargaining leverage in other cases," Grundfest said. "Other participants in this ring are now under much greater pressure to cut a deal."

Close to home: The case also has shined a harsh light on Silicon Valley. A number of its (now former) top executives were the main source of illegal tips about companies such as Google, Intel, eBay and Advanced Micro Devices, which netted Rajaratnam more than $60 million in profits and avoided losses, prosecutors estimated.

The government's star witness, Anil Kumar of Saratoga, a McKinsey & Co. senior partner, was paid $1.75 million, deposited into a Swiss bank account by Rajaratnam, a Wharton School chum, for tips about his clients. Two of those tips, involving AMD and eBay, profited Rajaratnam to the tune of $24.5 million alone.

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Kumar, a fast-rising, highly respected executive who was a co-founder of the Indian School of Business, was fined $2.8 million after pleading guilty to SEC charges. In the words of Rajaratnam's brother, in one of the dozens of tapes played at the trial, Kumar turned out to be "a little bit dirty."

As did another key witness, Rajiv Goel, the onetime managing director of Intel's treasury group, who is heard on a wiretap played for the jury chatting to Rajaratnam about Intel's pending deals and Rajaratnam telling Goel he was putting money into the latter's Charles Schwab account as a reward.

Goel, facing a possible 20 years in prison if he goes to trial, is cooperating with prosecutors.

Kamal Ahmed, a Morgan Stanley managing director at the investment bank's Menlo Park office, was named as passing along inside information about an AMD acquisition. Ahmed has not been charged and is said to be cooperating with Morgan Stanley's internal investigation.

"Silicon Valley is no more or less corruptible than Wall Street," said Robert Weisberg, a Stanford University law professor and co-director of the Stanford Criminal Justice Center. "But its networking atmosphere, which is very productive in terms of creativity and collegiality, sometimes veers into the legally problematic."

Next up: In the near term, say Weisberg and other legal observers, attention is likely to switch back to the Primary Global Research case, some of whose characters are directly linked to the Galleon case.

Eight employees or outside consultants of the Mountain View company have so far been named in government complaints, including a senior sales executive, James Fleishman, a Santa Clara resident indicted in February on securities fraud and conspiracy charges.

The company's "Taiwan liaison," Don Chu, will probably plead guilty to insider trading charges after "extensive plea negotiations," a judge said two weeks ago in the same Manhattan courthouse where the jury was weighing Rajaratnam's fate.

Chu was charged in November with passing tips to Richard Choo-Beng Lee, co-founder of Spherix Capital, a defunct San Jose hedge fund, who readers of this column might remember as a chief "cooperating witness" in the Galleon case.

In a related case, Donald Longueuil, a former portfolio manager with the $12 billion Connecticut hedge fund SAC Capital, pleaded guilty to insider-trading charges after admitting he bought shares in Santa Clara's Marvell Technology. Longueuil's information came via tips from another expert network firm, run by a former Citigroup hedge fund manager.

Yes, it's a round robin of rings, stretching from east to west: Choo-Beng Lee admitted to engaging in illegal insider trading when he worked at SAC Capital from 1999 until 2004.

"Besides Mr. Rajaratnam, expert networks are the other big loser" from Wednesday's guilty verdict, Frenkel said. "The all-counts conviction, and more prosecutions in the pipeline, are a major jolt to the hedge fund community as well," he said.

Drawing the lines: How big a jolt? Well, "it's bad for the business," a director of a Citigroup unit that sells the bank's hedge funds to investors told the Wall Street Journal on Wednesday.

"We've seen a significant upsurge among money mangers who are interested in knowing where the lines are," said Jay Gould, a former SEC attorney who heads up the investment funds and management practice at San Francisco's Pillsbury law firm.

"They know that outright stealing is wrong, and that trading on material, nonpublic information is off-limits. But they're not sure, for example, when a duty attaches to not trade on certain information."

Gould, like other legal observers, believes more insider-trading cases will be brought in light of Wednesday's verdict.

"It's pretty clear that this administration wants to clean up the markets, something that the last administration completely ignored, and that it's trying to set up rules so that the average investor feels some confidence in the fairness of the markets.

"And there'll still be folks who won't get the message, that believe the rules don't apply to them."