[ 2011-10-14 ]

Hedge-fund magnate Raj Rajaratnam leaves federal court in New York after being sentenced

Eleven years for insider dealing
Raj Rajaratnam, the hedge fund manager found
guilty of orchestrating one of America's biggest
insider trading scams, has been sentenced to 11
years in prison.

Although more lenient than the minimum of 19 years
that government prosecutors had sought, the
sentence is one of the longest handed down to
anyone for crimes on Wall Street.

In May, a New York jury found Mr Rajaratnam, the
Sri-Lankan born founder of hedge fund Galleon
Group, guilty of multiple counts of securities
fraud that saw him use inside information to trade
in the shares of companies including Goldman Sachs
and Google. Prosecutors claim he made more than
$70m (£45m) from the trades, while his lawyers
say their client made just over $7m.

"Raj Rajaratnam's criminal conduct was brazen,
arrogant, harmful and pervasive," said Jonathan
Streeter, a lawyer for the government.

During Thursday's sentencing in Manhattan, US
District Judge Richard Holwell acknowleged that Mr
Rajaratnam has diabetes and is in need of a kidney
transplant.

Prosecutors in New York have stepped up their
efforts to prosecute insider trading in the wake
of the financial crisis, and more than 50 people
have been charged in the past two years. Lawyers
for Mr Rajaratnam, who was arrested in October
2009, said that the court should not "single out
one man as the whipping boy for Wall Street
misdeeds.".

Insider dealing - Raj Rajaratnam found guilty in
$45m case
London (UK) - 11 May 2011 – The Times - Raj
Rajaratnam, founder of the US Galleon Group, has
been found guilty of insider trading by a jury in
New York in the largest ever case of its kind.

The verdict marks a significant victory for US
prosecutors and regulators in their attempt to
clamp down on insider trading and a chance to make
up for past failures in detecting both the Ponzi
scheme of the convicted fraudster Bernard Madoff
and the excesses of some Wall Street firms in the
run up to the financial crisis.

Rajaratnam, 53, was accused of generating more
than $45 million (£28 million) in illegal profits
by gleaning inside information from a network of
insiders about earnings statements and planned
mergers of a number of companies, including
Goldman Sachs, Google, ATI Technologies and Hilton
Hotels.

The jury of eight women and four men found him
guilty on 14 counts after hearing many hours of
wiretap evidence collected by investigators in a
tactic more often used against gangsters. The jury
also heard evidence from traders and company
executives who said they passed inside information
to him. The case and related investigations
sparked dozens of arrests and two dozen guilty
pleas from hedge fund managers, corporate
executives and industry consultants.

Prosecutors also said Rajaratnam’s sources
included Rajat Gupta, a former head of McKinsey
and a former director at Goldman Sachs, and Kamal
Ahmad, a Morgan Stanley investment banker. Both
deny wrongdoing, and neither has been criminally
charged.

Rajaratnam could face up to 20 years in prison.
and substantial fines.

Sent as a child from his home in Sri Lanka to be
educated in Britain, at Sussex University, and in
the US, at the University of Pennsylvania’s
Wharton School, Rajaratnam turned the immigrant
dream into reality by creating a hedge fund that
made him a billionaire. In 2009 Forbes Magazine
listed him as the 559th richest person in the
world with a fortune of $1.3 billion.

Source - The Telegraph

... go Back