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Saturday, 15 October 2011

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Heaviest term for insider trading

Former US hedge fund manager Raj Rajaratnam was sentenced Thursday to 11 years behind bars in one of the heaviest prison terms ever imposed for an insider trading scam.

Judge Richard Holwell argued Rajaratnam's health was an issue in refusing the prosecution's demand that the Sri Lankan-born founder of the Galleon Group hedge fund be given a minimum of 19 and a half years after netting some $72 million through insider trading.

Sri Lanka-born Rajaratnam, 54, was convicted in May on 14 counts of conspiracy and securities fraud related to his use of illegal insider tips for an edge on multi-million dollar stock market trades.

The trial grabbed attention because it exposed deeply hidden corruption on Wall Street and because prosecutors took the unusual step of using telephone wiretaps to gather evidence for a white-collar probe.

According to prosecutors, the founder of Galleon netted about $72 million on the basis of illegal tips, which included deals on shares in Goldman Sachs, Intel Corp, and Google Inc.In final pre-sentencing arguments, prosecutors demanded Rajaratnam be sentenced to as much as 293 months, or around 24 and a half years, in prison, and a minimum of 19 and a half years.

They told Holwell that Rajaratnam should be punished for personal gains and also for the money that his illegal trades earned Galleon.

Prosecutor Reed Brodsky argued that Rajaratnam further aggravated his crime by acting as leader of a wider conspiracy.

Defense lawyers made a last stand to save their client from spending what could be the rest of his life behind bars. They are asking for clemency over health issues that have not yet been made public, as well as arguing that insider trading is mostly a victimless crime, since Rajaratnam did not cause others to lose money. In addition, they dispute government allegations that Rajaratnam led any sort of network. AFP

 

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