US ex-hedge fund manager gets 11 years jail

Former US hedge fund manager Raj Rajaratnam was sentenced Thursday to 11 years behind bars in one of the heaviest prison terms ever imposed for an insider trading scam. Judge Richard Holwell also ordered the Sri Lankan-born founder of the Galleon Group hedge fund to pay a fine of $10 million. But he said Rajaratnam's poor health was the reason for refusing the prosecution's request that the former trader be given a minimum of 19 and a half years after netting some $72 million through insider trading. Holwell revealed for the first time publicly that Rajaratnam, 54, is suffering from "advanced diabetes leading to imminent kidney failure." The judge added he was also taking into account the fallen Wall Street trader's philanthropy, saying Rajaratnam's "response to and care for the less privileged go considerably beyond the norm." The judge also insisted that while "insider trading is insidious" it "poses a different danger to Enron-like fraud" or even the kind of pyramid scheme fraud carried out by convicted Wall Street conman Bernard Madoff. Rajaratnam will remain free until November 28, but for those who are sick "prison provides more intense punishment," Holwell added. According to The Wall Street Journal, no one convicted of insider trading has been sentenced to more than 10 years in prison in the United States for the past two decades. Rajaratnam, dressed in his customary dark suit, stood at the judge's request but declined to make any comment. He was convicted in May on 14 counts of conspiracy and securities fraud related to his use of illegal insider tips for an edge on multi-million-dollar stock market trades. The trial grabbed attention because it exposed deeply hidden corruption on Wall Street and because prosecutors took the unusual step of using telephone wiretaps to gather evidence for a white-collar probe. According to prosecutors, the founder of Galleon netted about $72 million on the basis of illegal tips, which included deals on shares in Goldman Sachs, Intel Corp, and Google Inc. In final pre-sentencing arguments, prosecutors demanded Rajaratnam be sentenced to as much as 293 months, or around 24 and a half years, in prison, and a minimum of 19 and a half years. They told Holwell that Rajaratnam should be punished for personal gains and also for the money that his illegal trades earned Galleon. Prosecutor Reed Brodsky argued that Rajaratnam further aggravated his crime by acting as leader of a wider conspiracy. But the defense had appealed for clemency pointing to his ill-health and saying the gains directly attributable to Rajaratnam were less than $8 million. They had argued that his sentence should be as low as six and a half years. Prosecutors called Rajaratnam a "serial inside trader" and "egregious offender" who profited handsomely from special deals and now deserves none. But in their pre-sentencing briefing, defense lawyers said a sentence of 20 years would even be considered at the high end for manslaughter and child pornography convicts and would, in his case, "guarantee" death in prison. Another smaller legal battle now looks set to be fought. Rajaratnam's lawyers have said they will appeal over the use of wire taps -- the key to the prosecution case -- and they are asking that the court allow the fallen trader to remain on bail pending that process. Click here to find out more!