Galleon hedge fund founder Raj Rajaratnam departs Manhattan Federal Court in New York May 11, 2011. Sentenced today, Thursday, October 13, 2011 to a term of 11 years in prison.
Raj Rajaratnam, the face of the biggest trading scandal in a generation, was sentenced to 11 years in prison, one of the longest-ever handed down for an insider case.
Prosecutors had sought a sentence of 19 years and seven months to 24 years and five months behind bars for the former hedge-fund titan. Mr. Rajaratnam's lawyers—citing health problems, among other factors—had been urging the judge to consider a much more lenient sentencing range of 6½ years to 8 years and 1 month.
U.S. District Judge Richard Holwell said in imposing sentence.
"His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated."
The judge also ordered Mr. Rajaratnam to pay a $10 million fine.
In the following video, former Assistant U.S. Attorney Jeffrey Smith and Andrew Stoltmann, a Chicago lawyer who represents investors in securities litigation, talk about Raj Rajaratnam's prison sentence.
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Former Assistant U.S. Attorney Jeffrey Smith and Andrew Stoltmann, a Chicago lawyer who represents investors in securities litigation, talk about Raj Rajaratnam's prison sentence. The Galleon Group LLC co-founder, whom prosecutors called "the modern face of illegal insider trading," was sentenced to 11 years in prison, one of the longest terms ever for insider trading. Smith and Stoltmann talk with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)
In the following video reporters interview the notorious Danielle Chiesi and her attorney Alan Kaufmann following her 30 month prison sentence on July 20, 2011. Checkout that pink dress and smile. What a shameless airhead if there ever was. I wonder if she will be smiling and laughing once she is prancing about in the general prison population and one of those bulldikes gets ahold of her.
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On July 20, 2011, Danielle Chiesi and her lawyer, Alan Kaufman, spoke after her sentencing in New York. Chiesi, the former New Castle Funds LLC analyst who was heard on a federal wiretap passing secret tips to Galleon Group LLC co-founder Raj Rajaratname, was sentenced to 30 months in prison.
The 54-year-old co-founder of Galleon Group, who was convicted of five counts of conspiracy and nine counts of insider trading in May, was accused by prosecutors of being at the center of the one of the biggest insider-trading schemes ever unearthed. Mr. Rajaratnam, who wore a dark suit with a blue-and-silver striped tie at his sentencing hearing, is the highest-profile person to be prosecuted so far as part of a broad U.S. government crackdown.
"He is arguably the most egregious insider trader to face sentencing in a courthouse in the U.S.," Assistant U.S. Attorney Reed Brodsky said during this morning's hearing. He again called Mr. Rajaratnam the "modern face of insider trading."
Mr. Rajaratnam's sentence will likely set "the upper threshold" for punishment of insider trading, Mr. Brodsky said. Future defendants' conduct will likely not rise to the level of Mr. Rajaratnam, Mr. Brodsky added.
Legal experts said the one-time hedge-fund titan's prison term could very well exceed 10 years, which would be the longest sentence imposed for insider trading in New York in the past two decades.
Mr. Rajaratnam's lawyers have asked for a lesser sentence because of an undisclosed medical condition he is suffering. Defense lawyer Terence Lynam said during today's sentencing hearing that "Mr. Rajaratnam is suffering from a progressive, degenerative disease." He has been hospitalized several times this year, Mr. Lynam said.
"Any lengthy term of imprisonment will surely shorten his life," Mr. Lynam said.
Federal prosecutors in Manhattan had accused Mr. Rajaratnam of persuading fellow hedge-fund traders, industry consultants and even corporate directors to provide him with confidential corporate information as he searched for an "edge" over the investing public. Prosecutors alleged Mr. Rajaratnam made profits or avoided losses of $72 million through his trading.
However, his lawyers have argued only about $7.46 million in alleged gains should be attributed to him personally. They have argued that the government has improperly inflated his potential guidelines range by including gains by Galleon, rather than profits he personally recognized, in the alleged scheme.
In arguing for leniency, Mr. Lynam on Thursday cited Mr. Rajaratnam's charitable giving and work with a Harlem-based youth organization. "Raj Rajaratnam has attempted to make the world a better place," Mr. Lynam said. "If there is a ledger in one's life, he should have some credit to draw upon in that ledger now that things have gone bad."
He also argued that the sentence the government is seeking is comparable only to murder and greater than other violent crimes. "The sentence that the government seeks would create such disparity," Mr. Lynam said. "There's no precedent for it."
Mr. Brodsky, the prosecutor, argued that insider trading wasn't a victimless crime. "Public companies suffered greatly because their inside information was stolen," Mr. Brodsky said during Thursday's hearing.
In any case, Mr. Rajaratnam is likely to have to spend some of his time in a low-security prison at a minimum, lawyers said. Sentencing length dictates in part the level of security for imprisonment. Mr. Rajaratnam won't qualify for a minimum-security prison if he has 10 years or more remaining on his sentence. In that case, he would likely go to a low-security prison, but he could be assigned to a medium-security prison if he were to receive 20 years or more.
Thursday's sentencing represents a dramatic fall for Mr. Rajaratnam from the heights of the hedge-fund world. A native of Sri Lanka, Mr. Rajaratnam received a master's of business administration from the prestigious Wharton School of the University of Pennsylvania and rose to become director of research and later president and chief operating officer of Wall Street investment bank Needham & Co.
A father of three, Mr. Rajaratnam left Needham at the end of 1996 and formed his own hedge-fund business, Galleon. By the time the government's investigation kicked into high gear in 2008, Mr. Rajaratnam's company was managing billions of dollars in assets. The fund company closed following Mr. Rajaratnam's arrest in 2009.
COMMENTARY: The punk deserved the full 19+ year prison term, but as often is the case, if you are rich and powerful, you can hire the best attorneys and they will either get you off the hook or you will be sentenced to a lighter term in prison. I still hope he ends up in a maximum security prison where the prison thugs can get their hands on him. I know that I spoil my fans rotten, but this news just broke, but I will post video and pics following the sentencing as I get them.
UPDATE: Just posted some new videos of that fat ass indian dude Raj Rajaratnam on the day of the sentencing. He should've gotten the full 19+years.
Courtesy of an article dated October 13, 2011 appearing in The Wall Street Journal
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