Rajaratnam sentence to 11 years for insider trading

Business

oi-Monika

By Monika Nihalani

Published: Friday, October 14, 2011, 12:36 [IST]

Rajaratnam, a Sri Lankan-born American citizen and the founder of Galleon Group sentenced to 11 years in prison for insider trading, the message sent to Wallstreet by the court. This is one of the longest terms ever for insider trading.

No one could ever have vision of such a penalization for insider trading. This could be seen as a lesson for all who think they could earn money by unscrupulous ways.

Raj Rajaratnam founded the Galleon Group, a New York based hedge fund management firm in 1997. The firm which was used to be one of the largest hedge fund management firms in the world got closed in 2009 due to founder's insider trading scandal.

Rajaratnam was arrested in October 2009 with multiple counts of fraud and insider trading.

He has been accused to make about $72 million over the period of six years through insider trading in the stocks of companies like Goldman Sachs, Intel, Google, ATI Technologies and Cleanwire Corp., as reported by bloomberg.

The hedge fund billionaire found guilty in U.S. District Court on 14 charges in May 2011.

He was out on $100 million bail, but U.S. District Judge Richard Howell denied his request to remain free on bail, and on October 13, 2009, he sentenced him to 11 years in prison. He extended his term because of his leading role in the overall scandal.

“Rajaratnam’s crimes reflect a virus in our business culture that needs to be eradicated,” Judge Holwell said while sentencing on Thursday in New York.

He will be surrendered to authorities on November 28, 2011.

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