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

Bob Doll's Ten Market Predictions For 2016

Jan 7 2016 | 9:37pm ET

Well-known market strategist Robert Doll has published his annual list of ten predictions...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...