Galleon founder gets 11 years
RAJ RAJARATNAM, the co-founder of the Galleon investment group in the US whom prosecutors called "the modern face of illegal insider trading", has been sentenced to 11 years in prison, one of the longest terms for such a crime.
RAJ RAJARATNAM, the co-founder of the Galleon investment group in the US whom prosecutors called "the modern face of illegal insider trading", has been sentenced to 11 years in prison, one of the longest terms for such a crime.Rajaratnam, 54, is the central figure in what US investigators called the largest hedge fund insider trading case in American history.The inquiry, which involved the widespread use of FBI wiretaps for the first time in such an investigation, led to the conviction of more than two dozen people.Prosecutors said Rajaratnam made more than $U$72 million by using illegal tips to trade in stocks of companies including Goldman Sachs, Intel and Google.The US District Judge Richard Holwell, who agreed with prosecutors that Rajaratnam led the scheme and obstructed a Securities and Exchange Commission inquiry, pointed to Rajaratnam's philanthropy and his diabetes and kidney disease in giving him less time than prosecutors had sought.The judge also ordered Rajaratnam to forfeit $US53.8 million and sentenced him to two years of supervised release after his prison term ends. "Insider trading is an assault upon our free markets," the judge said. Rajaratnam said nothing to reporters as he left the courthouse ."Two years ago, Raj Rajaratnam stood at the summit of Wall Street, commanding his own financial empire," the US attorney for the Southern District of New York, Preet Bharara, said after the hearing. "Today, Mr Rajaratnam stood once more and faced justice which was meted out to him."Rajaratnam was convicted by a federal jury on May 11 of all 14 counts of securities fraud and conspiracy. During the two-month trial, the court heard of his seven-year conspiracy to trade on inside information from corporate executives, bankers, consultants, traders and directors of public companies.Galleon was once among the 10 largest hedge funds, managing $US7 billion at its peak in 2008. Rajaratnam's net worth of $US1.3 billion made him the 559th richest person in the world, Forbes said in 2009.Before his arrest in October 2009, Rajaratnam claimed that Galleon analysts had an advantage over rivals because most were trained as engineers and all focused exclusively on research. However, Adam Smith, a former Galleon trader, testified that Galleon's edge came from illegal tips from company insiders.