RAJ RAJARATNAM, the billionaire US hedge fund manager, has been sentenced to 11 years in prison, one of the longest terms handed down for insider trading on Wall Street in recent times.
The financier was also ordered to pay a $10 million (€7.25 million) fine plus $53.8 million in restitution. He escaped a longer prison sentence because of ill health.
Inside the packed courtroom in lower Manhattan yesterday, Mr Rajaratnam (54) sat expressionless between two lawyers as the judge read the sentence.
Throughout his two-year legal battle and seven-week trial, the Sri Lankan-born Mr Rajaratnam has publicly kept his composure.
Preet Bharara, the US attorney whose office prosecuted Mr Rajaratnam, said: “Privileged professionals do not get a free pass to pursue profit through corrupt means. The message is the same for everyone, no matter who you are or how much money you have – obey the law or face the fate of those who don’t.”
Judge Richard Holwell handed down the sentence after concluding that Mr Rajaratnam made more than $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,” he said.
The judge revealed details of Mr Rajaratnam’s previously undisclosed medical problems. He said the hedge fund founder needed a kidney transplant and suffered from advanced diabetes.
Judge Holwell denied a motion by Mr Rajaratnam’s lawyers for him to stay out of prison pending an appeal. He is required to go to prison on November 28th. His lawyers asked that he be detained at a medical facility in Butner, North Carolina – the site where Ponzi mastermind Bernard Madoff is serving his 150-year sentence.
Galleon Group, Mr Rajaratnam’s hedge fund, reaped profits through tips he learnt from a circle including former business classmates, top corporate executives and a former teenage beauty queen.
The case had captivated Wall Street as prosecutors and Federal Bureau of Investigation agents used wire taps to record traders’ private conversations. – (Copyright The Financial Times Limited 2011)
