Thread: Rajaratnam sentenced to 11 years for insider trading

Rajaratnam sentenced to 11 years for insider trading

Updated 2h 53m ago Comments 112

NEW YORK (AP) – A former billionaire described by the government as "the modern face of illegal insider trading" was sentenced Thursday to 11 years in prison, longest insider trading sentence ever, but far short of the two decades sought by prosecutors.

Galleon Group founder Raj Rajaratnam also was fined $10 million by U.S. District Judge Richard Holwell, who said he concluded that Rajaratnam made well over $50 million in profits from his illegal trades.

"His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated," Holwell said.

The Sri Lanka-born Rajaratnam, 54, was ordered to report to a yet-to-be-designated prison on Nov. 28.

The judge gave Rajaratnam some leniency, citing his need for a kidney transplant and his advanced diabetes. And he credited Rajaratnam's charity work, which he called "the defendant's responsiveness to and care for the less privileged." The judge cited Rajaratnam's work to help victims of the earthquake in Pakistan and Sept. 11, among others.

Asked if he wished to speak at his sentencing, Rajaratnam said only, "No, thank you."

The sentencing culminates a series of convictions and sentencings that followed the October 2009 announcement of Rajaratnam's arrest.

More than two dozen people were arrested for related crimes; all were convicted. The other defendants got sentences ranging from a few months to 10 years.

Assistant U.S. Attorney Reed Brodsky told Holwell before the sentence was announced that Rajaratnam made up to $75 million in illegal profits from insider trading he indulged in since at least the late 1990s.

The government has said he switched so much money around within his multibillion dollar funds that the movement of price in individual stocks could be traced to his trading whims.

"Today you sentence a man who is the modern face of illegal insider trading," Brodsky told Holwell. "He is arguably the most egregious insider trader to face sentencing in a courthouse in the United States."

Prosecutors had asked Holwell to send Rajaratnam to prison for at least 19½ years for his conviction in May on securities fraud charges. They said federal sentencing guidelines called for up to 24½ years. A Probation Department report recommended a 15-year sentence.

The defense asked for leniency partly based on Rajaratnam's "failing health" and his "unique constellation of ailments."

Attorney Terence Lynam told Holwell that Rajaratnam should receive credit for his considerable charitable works and he urged compassion for his illnesses.

"Any lengthy term of imprisonment will surely shorten his life," he said. "Based on the conduct for which he was convicted, he does not deserve to die in prison."

Lawyers for the Sri Lanka native argued for 6½ to 9 years. They said the illegal profits actually total around $7 million, when the trades at his Galleon Group are disregarded.

http://www.usatoday.com/money/markets/s ... 50752958/1

Hedge Fund Founder Raj Rajaratnam Sentenced in Manhattan Federal Court to 11 Years in Prison for Insider Trading Crimes

Rajaratnam Receives Longest Prison Term in History for Insider Trading

U.S. Attorney’s Office October 13, 2011
Southern District of New York(212) 637-2600

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that RAJ RAJARATNAM was sentenced today in Manhattan federal court to 11 years in prison stemming from his involvement in the largest hedge fund insider trading scheme in history. RAJARATNAM was the managing member of Galleon Management, LLC (“Galleonâ€