Billionaire Rajaratnam gets 11 years for insider trading

October 13, 2011

Billionaire Rajaratnam gets 11 years for insider trading

Fallen hedge fund billionaire Raj Rajaratnam, who was convicted by a jury of 14 counts of conspiracy and securities fraud last May, has received the longest-ever prison sentence for insider trading.

US district judge Richard Holwell sentenced Mr. Rajaratnam, the former head of the Galleon Group hedge fund, to 11 years in prison.  “His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated,” judge Holwell told a packed Manhattan court.

Rajaratnam was also ordered to pay a $10 million fine and to forfeit $53.8 million and go through two years of supervised release after his prison term is up.

Prosecutors had been pushing for 25-year sentence after Rajaratnam’s conviction in the biggest insider trading investigation ever conducted by US authorities.

Legal experts said that while prosecutors may have been disappointed with the decision, the sentence was still the highest ever given for insider dealing.

Prosecutors found that Rajaratnam, 54, had used a network of insiders to gain illegal tips on some of the world’s biggest companies including Goldman Sachs, Google, Hilton and Intel.  The scandal also dragged in Rajat Gupta, a former Goldman Sachs director and ex-boss of the McKinsey management consultant group, who is now facing a criminal investigation over tips he allegedly gave to Rajaratnam.

His defense team had asked that Rajaratnam serve his prison term at North Carolina’s, Butner Federal Correction Complex.  Bernie Madoff, the convicted Ponzi scheme mastermind, is currently serving a 150-year term at the facility.  Rajaratnam had nothing to say to reporters as he left the courthouse.

Publisher: Salient News