Ilya Marritz covers business for WNYC.
Hedge Fund Boss Gets 11 Years in Insider Trading Probe
Thursday, October 13, 2011 - 12:00 AM
A billionaire convicted in the biggest insider trading case involving hedge funds in the U.S. was sentenced to 11 years in prison Thursday, five months after he was convicted by a federal jury in a Manhattan courtroom.
Raj Rajaratnam, 53, and founder of one of the biggest hedge funds in the U.S, was also fined $10 million.
"His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated," U.S. District Judge Richard J. Holwell said.
The judge said Rajaratnam needs a kidney transplant and has advanced diabetes and took his charity work into consideration in giving him leniency.
Rajaratnam was found guilty in May of 14 counts of securities fraud and conspiracy, committed while he ran the Galleon Group.
Prosecutors said he was the central figure in a vast insider trading network and made an estimated $63.8 million in illegal profits.
The case against the financier relied on wiretapped conversations recorded by federal agents over the course of nine months.
Wherever possible, Rajaratnam's team tried to raise doubts about the tapes, discredit witnesses and highlight Galleon's legitimate trading and research. He never took the stand in his own defense.
Rajaratnam could spend as many as 25 years in prison. Since his conviction, he's been in home detention, on $100 million bail.
More than two dozen others have already been convicted in related cases.
Before he was arrested in October 2009, Rajaratnam earned a spot on Forbes' list of the richest Americans (No. 262), with net worth estimated at $1.8 billion.
With the Associated Press