The case brought against the founder of Galleon Management and its technology hedge funds Friday, alleging more than $20 million in illegal profits from insider trading, is more than a shot across the bow of a company named for a ship favored by pirates.

The hedge-fund industry is a big money game that thrives on personal connections, immense compensation, and almost no regulation in any jurisdiction. As SEC enforcement director, Robert Khuzami said of the lead defendant in this case: “He is not a Master of the Universe. Instead, he is a Master of the Rolodex.”

Kumar’s sin is magnified because he comes from the firm famous for its holier-than-thou attitude. McKinsey consultants are imbued with a culture of keeping their...