Raj Rajaratnam, a billionaire investor, once ran the Galleon group, which became one of the world's largest hedge funds. On May 11, 2011, he was found guilty of fraud and conspiracy, becoming the most prominent figure convicted in the government's crackdown on insider trading on Wall Street.
After deliberating for over two weeks, a federal jury in Manhattan convicted Rajaratnam on all 14 counts against him.
Rajaratnam was sentenced in October 2011 to 11 years in prison and fined $10 million. It was the longest-ever prison sentence for insider trading, a watershed moment in the government's aggressive two-year campaign to root out the illegal exchange of confidential information on Wall Street.
The sentence was lower than the range of roughly 19 to 24 years requested by the government.
US District Judge Richard J Holwell announced the sentence after concluding that Rajaratnam made well over $50 million in profits from his illegal trades. The judge also said Rajaratnam needed a kidney transplant and suffered from advanced diabetes, an illness he took into consideration in giving him leniency.
In December, a federal court denied Rajaratnam's request to remain free on bail while appealing his conviction, forcing the fallen hedge fund manager to report to prison.
When Rajaratnam was charged in October 2009, he became the hub of what developed into a sprawling, multi-year investigation. The Justice Department and the Securities and Exchange Commission accused Rajaratnam and five others of relying on a vast network of company insiders and consultants to make tens of millions in profits.
During the course of the case, 21 defendants pleaded guilty, including former executives at IBM, Intel and Bear Stearns.
The case continued after Rajaratnam's conviction, with Rajat Gupta charged with insider trading on October 26. Gupta, a former director of Goldman Sachs and Procter & Gamble, was charged by a federal grand jury with one count of conspiracy to commit securities fraud and five counts of securities fraud.
Gupta is accused of being "the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam," according to Preet Bharara, the United States attorney in Manhattan. Among the illegal tips that Gupta is accused of passing to Rajaratnam is advance news of Warren E Buffett's $5-billion investment in Goldman Sachs in 2008.
©2012 The New York Times News Service
