Raj Rajaratnam, the hedge fund billionaire at the center of one of the largest insider trading cases in history, was sentenced Thursday to 11 years in prison, according to the U.S. attorney’s office in Manhattan.
It was the longest prison term in history for insider trading, the federal prosecutor’s office said, and was the culmination of a years-long federal probe of corruption in the stock market. The Rajaratnam case pulled back the curtain on a long-suspected dark side of the hedge fund business.
Rajaratnam, who headed Galleon Management, was convicted in May on 14 counts of conspiracy and securities fraud for illegally using inside information to trade in stocks such as Goldman Sachs and Intel. The trading generated profits or avoided losses of $72 million, the government estimated.
Rajaratnam’s crimes “reflect a virus in our business culture that needs to be eradicated,” federal judge Richard J. Holwell said at the sentencing in New York.
The 54-year-old was ordered to forfeit $53.4 million and pay a fine of $10 million. Currently out on a $100 million bail, he is scheduled to report for prison on Nov. 28. The Associated Press reported from New York that defense lawyers asked that Rajaratnam be allowed togo to the medical facility at the Butner Federal Correctional Complex in North Carolina, where Bernard Madoff is serving his 150-year sentence for running a Ponzi scheme that cheated thousands of people out of billions of dollars.