NEW YORK – A former billionaire who was the primary target of what prosecutors called the biggest hedge fund insider trading case in U.S. history was sentenced Thursday to 11 years in prison.
Galleon Group founder Raj Rajaratnam also was fined $10 million. U.S. District Judge Richard J. Holwell announced the sentence after concluding that Rajaratnam made well over $50 million in profits from his illegal trades.
"His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated," Holwell said.
The judge also said Rajaratnam needs a kidney transplant and suffers from advanced diabetes, an illness he took into consideration in giving him leniency.
And he credited Rajaratnam's charity work, which he called "the defendant's responsiveness to and care for the less privileged." The judge cited Rajaratnam's work to help victims of the earthquake in Pakistan and Sept. 11, among others.
The sentencing culminates a series of convictions and sentencings that followed the October 2009 announcement of Rajaratnam's arrest. More than two dozen people were arrested; all were convicted. The other defendants got sentences ranging from a few months to 10 years.
The prosecution placed Rajaratnam's profits from illegal trades between $70 million and $75 million, saying he switched so much money around within his multibillion dollar funds that the movement of price in individual stocks could be traced to his trading whims.
Prosecutors had asked Holwell to send the 54-year-old to prison for at least 19 1/2 years for his May conviction on securities fraud charges. They said federal sentencing guidelines called for up to 24 1/2 years.
The defense asked for leniency partly based on Rajaratnam's "failing health" and his "unique constellation of ailments." They said a lengthy prison term will amount to a death sentence.
Lawyers for the Sri Lanka native argued for 6 1/2 to 9 years. They said the illegal profits actually total around $7 million, when the trades at his Galleon Group are disregarded.