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

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...