This afternoon, U.S. District Judge Richard Holwell sentenced Galleon Group co-founder Raj Rajaratnam to a record 11 years in prison for insider trading. Here are the key things you need to know:
- Rajaratnam's sentence is reportedly the longest ever for insider trading. Previously, the longest sentence in an insider trading case is said to have been the 10 years given to former Credit Suisse Group AG banker Hafiz Muhammad Zubair Naseem. Former Galleon trader Zvi Goffer was also sentenced to a 10-year term last month.
- Judge Richard Holwell said the term of the sentence was enhanced due to Rajaratnam's leadership role in the scheme and also due to his obstruction of a related SEC investigation. On the other hand, JUdge Holwell found that Rajaratnam's health issues ("advanced diabetes leading to kidney failure requiring a transplant," according to Business Insider) weighed against the longer sentences requested by prosecutors and the probation department (24 and 15 years, respectively). "Prison is a more intense experience for people with serious health conditions," Judge Holwell stated.
- Rajaratnam sought to remain free on bail while he appeals his conviction, but Judge Holwell rejected this request and ordered Rajaratnam to report to the medical center at the Butner Federal Correctional Complex by November 28. By coincidence, Butner is now the home of Bernard Madoff.
- Although prosecutors argued that there were countless victims of Rajaratnam's crimes, Judge Holwell found that none were identifiable.
- Over 200 people submitted letters to the court on Rajaratnam's behalf, including former colleagues at Galleon, his brother, his aunt, his housekeeper, and the doorman in his apartment.
- Rajaratnam intends to appeal his conviction, and will reportedly argue that the government's application to wiretap his conversations omitted key information that "might have persuaded a federal judge not to grant the wiretap application in the first place."