A former billionaire described by the US government as "the modern face of illegal insider trading" was sentenced on Thursday to 11 years in prison, the longest insider trading sentence ever but far short of the two decades sought by prosecutors. Galleon Group founder Raj Rajaratnam also was fined $10 million by US District Judge Richard J Holwell, who said he concluded that Rajaratnam made well over $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," Holwell said.
The Sri Lanka-born Rajaratnam, 54, was ordered to report to a yet-to-be-designated prison on November 28.
The judge gave Rajaratnam leniency, citing his need for a kidney transplant and his advanced diabetes. And he credited Rajaratnam's charity work, which he called "the defendant's responsiveness to and care for the less privileged." The judge cited Rajaratnam's work to help victims of the earthquake in Pakistan and Sept. 11, among others.
Asked if he wished to speak at his sentencing, Rajaratnam said only, "No, thank you."
The sentencing culminates a series of convictions and sentencings that followed the October 2009 announcement of Rajaratnam's arrest. More than two dozen people were arrested; all were convicted. The other defendants got sentences ranging from a few months to 10 years.
Assistant US Attorney Reed Brodsky told Holwell before the sentence was announced that Rajaratnam made up to $75 million in illegal profits from insider trading he indulged in since at least the late 1990s. The government has said he switched so much money around within his multibillion dollar funds that the movement of price in individual stocks could be traced to his trading whims.
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