The longest prison sentence ever dished out for the crime of insider trading has just been given this morning.
Hedge fund billionaire Raj Rajaratnam was sentenced to 11 years in prison for insider trading practices that resulted in over $50 million in profits. The founder of the Galleon Group (which used to be one of the largest hedge fund management firms in the world) was also ordered to pay $10 million in fines.
Rajaratnam, who was born in Sri Lanka, was arrested by the FBI in 2009. Prosecutors called him “the modern face of illegal insider trading” and accused him of profiting on tips from a well-connected group of insiders that included former IBM and Intel execs. In May, he was convicted of 14 counts of conspiracy and securities fraud.
Good news for Raj – his sentence, though the longest in history for insider trading, is still shorter than the up to 24 years the the federal government requested.
According to the NYT, his sentence is an example of recent trend – white collar criminals receiving harsher penalties. Although some down at the OccupyWallStreet protests might scoff at that notion, insider trading penalties have been on the rise as of late.
A former Galleon trader, Zvi Goffer, got a 10 year sentence for his role in the insider trading. The average length of sentences for the other people convicted in Rajaratnam’s case is 3 years.
Twitter is sounding off about the sentencing, and Raj isn’t getting much sympathy –
Raj Rajaratnam hahahaha !! Gotcha ! Happy ending In jail
“Raj Rajaratnam has attempted to make the world a better place,” Mr. Lynam said. Yeah, right.
Some have used this sentence as an example that there is some justice for financial crimes –
@CNNMoney: Hedge fund manager Raj Rajaratnam sentenced to 11 years and fined $10 million for insider trading”NO JUSTICE, NO PE.. Oh RT “
In 2009, Rajaratnam was the 236th richest man in America and the richest person in the world to have been born in Sri Lanka.
What do you think about this sentence? How do you think the political climate affected it, if at all? Let us know in the comments.