A judge cited the "huge and brazen" nature of the crime Tuesday as he imposed a record $92 million civil penalty on a billionaire hedge fund boss snared in the biggest insider trading case ever.
U.S. District Judge Jed Rakoff ordered the penalty for Raj Rajaratnam, saying his insider trading scheme "cries out for the kind of civil penalty that will deprive this defendant of a material part of his fortune." He said civil penalties were designed by the Securities and Exchange Commission to be severe enough that insider trading would be a money-losing proposition.
Rajaratnam was arrested in October 2009, the same year he was ranked No. 559 by Forbes magazine among the world's wealthiest billionaires, with a $1.3 billion net worth. His attorneys have said he is no longer a billionaire.
Rajaratnam, 54, was convicted this year of insider trading and was sentenced last month to 11 years in prison. In the criminal case, he was fined $10 million and ordered to forfeit $53.8 million in what the judge said were illicit profits from trading on confidential corporate information. He is scheduled to report to prison on Dec. 5.
Prosecutors said he earned as much as $75 million in illegal profits in a case that resulted in more than two dozen convictions. They said he acted on secrets he got from friends and colleagues in the securities industry and at public companies.
Rakoff said he arrived at the penalty figure by taking the $30.9 million figure recommended by Rajaratnam's lawyers and tripling it.
In a statement from Washington, the SEC said the $92.8 million civil penalty against Rajaratnam was the biggest ever in an SEC case for widespread insider trading by an individual.
"The penalty imposed today reflects the historic proportions of Raj Rajaratnam's illegal conduct and its impact on the integrity of our markets," said Robert Khuzami, director of the SEC's Division of Enforcement.
In all, the SEC has pursued more than $90 million in illicit profits or losses avoided by 29 individuals and entities including hedge fund advisers, Wall Street professionals and corporate insiders.
A message seeking comment left with a lawyer for Rajaratnam was not immediately returned.
AP Business Writer Marcy Gordon in Washington contributed to this report.
Suspect in Custody After Shooting at Colorado Springs Planned Parenthood UPDATE: Three People Have Died, Shooter Identified | Christine Rousselle
Active Shooter Near Planned Parenthood Location in Colorado UPDATE: Suspect Has Surrendered to Police | Christine Rousselle
John Hawkins - 15 Excerpts That Show How Radical, Weird And Out of Touch College Campuses Have Become
S.C. Woman Outdraws, Outshoots, And Kills CraigsList Robber - Bearing Arms - Guns Saving Lives, South Carolina
Shocker: 2008 Obama supporter thinks democracy doesn't work! | RedState
Importing Terrorism and Other American Values | Human Events
'More white Christian terrorism?' Tweeters profile perp in reported Planned Parenthood shooting
George Friedman - The Geopolitics of France: Maintaining Its Influence in a Changing Europe
Reports: Active shooter barricaded in Colorado Springs Planned Parenthood, firing at cops; Update: Cops confronting shooter inside the building