Thursday, 28 July 2016
Last updated 3 hours ago
Nov 9 2011 | 12:38pm ET
Having already received the longest-ever prison sentence for insider-trading, Raj Rajaratnam can now boast the largest-ever fine in an insider-trading case.
The Galleon Group founder earned that highly-unwelcome honor yesterday, when U.S. District Judge Jed Rakoff ordered him to pay $92.8 million in the Securities and Exchange Commission civil case against him. The judge rejected the defense's argument that a decade in prison and the $63.8 million in fines and restitution their client has already paid in the criminal case were sufficient.
"This misapprehends both the nature of this parallel proceeding and the purposes of civil penalties," Rakoff wrote. "SEC civil penalties, most especially in a case involving such lucrative misconduct as insider trading, are designed, most importantly, to make such unlawful trading a money-losing proposition not just for this defendant, but for all who would consider it."
The $92.8 million fine is the maximum allowed under law, equivalent to three times Rajaratnam's illicit gains.
It is unclear how much money Rajaratnam, who once boasted an estimated fortune of $1.5 billion, still has. Rajaratnam fell off the Forbes magazine billionaires list after his October 2009 arrest. A pre-sentence report, which is not public, does list Rajaratnam's current net worth, which "considerably exceeds" the $63.8 million Rajaratnam was ordered to pay after his conviction in May.