Raj Rajaratnam gets 11-year term in Galleon insider trading case
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Hedge fund magnate Raj Rajaratnam was sentenced to 11 years in prison -- the longest sentence ever for an insider-trading case, prosecutors said.
The Galleon Group founder was convicted in May on 14 counts of conspiracy and securities fraud following a two-month trial. Many considered the conviction to be the heaviest clampdown on Wall Street bad behavior since Ivan Boesky went to prison for two years in the 1980s.
Rajaratnam’s conduct “reflects a virus in our business culture that needs to be eradicated,” said U.S. District Judge Richard J. Holwell while handing down the sentence.
When asked by Holwell if he wanted to speak, Rajaratnam tersely refrained.
Prosecutors relied on extensive electronic wiretaps to nab Rajaratnam, who was found guilty of making more than $50 million in illicit profits by acting on secrets from contacts at upper-echelon firms such as Goldman Sachs Group Inc., McKinsey & Co. and Google Inc.
Prosecutors had sought a sentence of 15 to 20 years. In handing down a more lenient sentence, Holwell cited Rajaratnam’s advanced diabetes and other factors.
Silence hung over the courtroom as the sentence was read, Rajaratnam sitting motionless. After court adjourned, he turned to face the room with an elusive grin that betrayed no emotion.
Since his arrest in October 2009, more than 20 others involved in the case have cut deals with prosecutors. Rajaratnam must report to prison within 45 days.
-- Tiffany Hsu and Nathaniel Popper