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Dotcom star charged with securities fraud

Nirshan Perera

Three years ago, Srinivas Anumolu was a bona fide member of the Silicon Raj, that elite group of desi entrepreneurs who transformed the Valley into the world's hi-tech Mecca.

His company, eLance.com, caught the crest of the dotcom wave, attracting gallons of cash from institutional investors and equally desirable attention splashed across the pages of the Wall Street Journal, The New York Times and The Economist.

But in the end, the mountains of praise could not fend off the ghosts of Anumolu's past.

Last week, the former securities trader at the New York Life Insurance Company was indicted for accepting kickbacks and 'other improper gifts and gratuities' while managing a $10 billion portfolio.

The Securities and Exchange Commission alleges in a civil law suit that Anumolu and a co-worker, Anthony Dong-Yin Shen, accepted almost $500,000 in cash and gifts from sales personnel at three brokerage firms. The bribes allegedly bought steeply discounted securities from New York Life and hefty commissions for everyone involved.

Representatives of eLance, an online marketplace for freelancers that is soaring even in the dotcom downturn, would not comment in detail on Anumolu's former activities.

"This is a very unfortunate situation, and it would be inappropriate for us to comment on it since the matter is now in the hands of the judicial system," Maria Miller, vice-president, marketing, told rediff.com

"We would like to emphasize, however, that the allegations focus on business transactions, which occurred prior to Mr Anumolu's founding and involvement with eLance," she added. "We have a very strong management team in place now and we are focusing on the job at hand."

Since its 1990 launch, the company based in Sunnyvale, California, has raised $66 million in funding, including a $50 million round led last year by venture capital powerhouse Klein Perkins Caulfield & Byers. At the time of his arrest, Anumolu was eLance's general manager.

Reflecting on his dotcom superstardom, he had told rediff.com in 1999 that it was important for budding business people to have good mentors. "The younger generation of entrepreneurs like Venky Harinarayan, Ram Shriram and Sabeer Bhatia have served as huge inspirations for me," he said. "They have shown that anyone with a great idea can quickly create a worldwide company that touches millions of people."

Anumolu, who is currently in prison awaiting a hearing on Wednesday, could also be arraigned on criminal charges. If he is found guilty, the IIT Madras alumnus could face deportation to India.

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