Wednesday, 1 October 2014
Last updated 3 hours ago
Oct 5 2011 | 11:46am ET
With just over a week to go before Raj Rajaratnam learns how long he'll spend in prison, his lawyers and the prosecutors that won his conviction on insider-trading charges sparred over how U.S. District Judge Richard Holwell should decide that issue.
The Galleon Group founder's defense team for the first time offered a concrete idea of the sort of sentence they think Rajaratnam should get: six-and-a-half to eight years. Prosecutors countered with 19½ to 24½ years.
The government said that the "historic nature of his crimes," among other factors, call for the decades-long sentence. Prosecutor Andrew Michaelson said that Rajaratnam's ill-gotten gains from the scheme amounted to $72 million—including losses avoided. That figure is critical, as schemes over $50 million warrant longer sentences under federal sentencing guidelines.
Also exacerbating Rajaratnam's potential sentence is the fact that he led a conspiracy of five or more people.
"Mr. Rajaratnam is a uniquely situated individual compared with all the others," another prosecutor, Reed Brodsky, said. "He is an individual at the top of a pyramid, the head of a hedge fund who's orchestrating and controlling interlocking insider-trading schemes. And, by far and away, he's the clear leader and organizer."
Rajaratnam's lawyers were having none of it. Rajaratnam himself earned only $7.4 million in fees and from his personal illegal trading, they said, and took issue with the prosecutions' "pyramid" characterization.
"A lot of people just wanted to ingratiate themselves to Mr. Rajaratnam," one of his attorneys, Terrence Lynam, said.
Rajaratnam's lawyers also complained that prosecutors were trying to lengthen their client's stay in prison based on crimes he wasn't charged with, including obstruction of justice and another $8.2 million earned on a Galleon fund that was not involved in the two-month trial, which ended in Rajaratnam's conviction in May on all 14 counts of conspiracy and fraud. Samidh Guha, another Rajaratnam lawyer, said that prosecutors didn't have enough evidence to charge him with obstruction.
Brodsky rejected that argument, noting that "the government could've charged him with 100, 200, 400, maybe even 1,000 counts. There are hundreds of trades he made based on inside information."
Rajaratnam is to be sentenced on Oct. 13. Holwell said he would rule on today's issues on that day, prior to imposing sentence.
Sep 22 2014 | 4:15pm ET
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Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
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