Rajaratnam Fights Proposed $100M SEC Fine

Nov 2 2011 | 10:52am ET

Raj Rajaratnam has suffered enough—and isn't such a bad guy, despite his conviction on insider-trading charges.

That's the gist of the Galleon Group founder's argument as to why he should be spared paying more than $100 million in addition disgorgement and fines. Rajaratnam's lawyers told U.S. District Judge Jed Rakoff, overseeing the Securities and Exchange Commission's lawsuit against him, that the former hedge fund manager has "already suffered enormous financial consequences" as a result of his conviction. Those consequences, plus an 11-year prison term, are "sufficient" punishment for the crime, they said.

The SEC disagrees: It is seeking more than $41 million in disgorgement and prejudgment interest and fines of $94.7 million—figures that would probably be reduced by the $53.8 million in disgorgement and $10 million in fines Rajaratnam has already paid in the criminal case.

Rajaratnam's lawyers took issue with the SEC's math in determining those figures, but primarily urged that Rajaratnam's criminal sentence and his actions to protect client assets in the wake of his arrest be taken into account.

Rajaratnam's decision to quickly shutter Galleon and return money to investors after his 2009 arrest "show that he was not motivated by greed or by the desire to make a lot of money."


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of