Judge to weigh how much Rajaratnam gained on trades

THE JUDGE who will decide the fate of Raj Rajaratnam is set to hear arguments next week over the amount of illicit profits the convicted Galleon Group hedge fund founder collected from insider trading.The hearing on October 4 is part of US District Judge Richard Holwell’s preparations before he sentences Rajaratnam nine days later – an event expected to be one of the most closely watched sentencing proceedings for an insider trading case in years.A spokeswoman for the Manhattan federal court and Holwell’s courtroom deputy said on Tuesday (September 27) that the judge had scheduled the hearing over “loss amount” in the case. The judge’s determination after hearing arguments from prosecutors and defense lawyers will have an impact on his sentence decision.Rajaratnam was convicted by a jury in May at a two-month-long trial in which the government said his illicit gains amounted to $63m (£40.22m) from insider trading for several years up until his arrest in October 2009.In pre-sentencing papers submitted to the judge, Rajaratnam’s lawyers argued that the government had misapplied the federal sentencing guidelines in their calculations.“The cumulative effect of these errors is a gain calculation of more than $63 million, which massively overstates the seriousness of the offense,” a pre-sentencing defense memorandum said.US prosecutors have asked Holwell to sentence the onetime high-flying hedge fund founder to between 19-1/2 years and 24-1/2 years, reflecting non-binding sentencing guidelines. The jury convicted Rajaratnam of 14 criminal charges of securities fraud and conspiracy.Rajaratnam is represented by law firm Akin Gump Strauss Hauer & Feld, whose lawyers have asked the judge to sentence him below the guidelines.They have also requested that Rajaratnam be allowed to remain under house arrest, under strict electronic surveillance and $100m (£63.83m) bond, while he appeals his conviction, specifically evidence gathered using wiretaps.