Raj Rajaratnam Sentenced for Insider Trading
Hedge fund billionaire Raj Rajaratnam was sentenced Thursday to 11 years in prison, the longest sentence ever for insider trading. The 54-year-old former Galleon Group chief was convicted in May on 14 counts of conspiracy and securities fraud. He used inside information and sources to trade stocks like Goldman Sachs, Google, Hilton and Intel, totaling an estimated $72 million.
In addition to the prison sentence, Rajaratnam was ordered to forfeit $53.4 million and pay a fine of $10 million. His defense says he'll appeal the conviction. Experts say Rajaratnam's sentencing reflects a trend toward longer prison sentences, as the government tries to go hard on insider trading. Rajaratnam's 11 year penalty far exceeds that of past big-name white collar crooks like Ivan Boesky, who was sentenced to three years for insider trading in the 1980s.
Rajaratnam is currently out on $100 million bail, but is scheduled to report for prison on November 28. He will reportedly serve out his sentence at the federal medical center in Butner, North Carolina, because of his health problems, which include diabetes. It's the same prison where Bernard Madoff is serving out his 150-year sentence for a massive Ponzi scheme. John Hinckley, Jr., who tried to assassinate President Reagan, also did time at Butner.