RAJ RAJARATNAM, a self-made hedge fund tycoon convicted in the biggest Wall Street trading scandal in a generation, was ordered to serve 11 years in prison, the longest sentence ever in an insider-trading case but far less than prosecutors sought.
Thursday (October 13)’s sentencing caps a prosecution, marked by secret wiretaps of Rajaratnam and his associates, that shocked the investment world. The Sri Lanka-born fund manager once stood atop a $7bn (£4.43bn) New York hedge fund, but was found guilty of running a network of informants who supplied him with corporate secrets.
The sentence was lighter than the 19½ year minimum term that prosecutors had sought, and was only slightly more than the 10 years handed down recently to a former Rajaratnam employee at the now-shuttered Galleon Group hedge fund.
The judge, in rejecting prosecutors’ request for a tougher sentence, said 54-year-old Rajaratnam faces “imminent kidney failure” due to advanced diabetes, and may need a kidney transplant. He also cited the multimillionaire’s charitable work including helping victims of natural disasters in Sri Lanka and Pakistan.
“Prison creates a more intense form of punishment for critically ill prisoners,” US District Judge Richard Holwell said. He added, however, that illness does not provide “a get-out-of-jail-free card.”
Rajaratnam, standing with his lawyers and looking straight ahead, was expressionless after hearing the sentence. Before the judge announced his ruling, Rajaratnam said “No thank you, your honor,” when asked if he wanted to make a statement.
