Today, in a case closely watched on Wall Street, Judge Richard Holwell sentenced Raj Rajaratnam, the Managing Member of Galleon Management, LLC, to Eleven years in prison. Although the sentence is the longest to date for anyone involved in the Galleon Group, it fell considerably short of the lengthy sentence sought by the Government.
Mr. Rajaratnam was convicted by a jury in May 2011 of five counts of conspiracy to commit securities fraud and nine counts of securities fraud, stemming from what prosecutors called "his involvement in the largest hedge fund insider trading scheme in history" (previously discussed here).
Prior to the sentencing, the Wall Street Journal’s Law Blog provided a time line of the events in this case and the related cases since the jury convicted Mr. Rajaratnam. As discussed here, prior to today, the longest sentence imposed was in the case against Zvi Goffer, who formerly worked at with the Schottenfeld Group LLC which was part of Mr. Rajaratnam’s Galleon Group. Mr. Goffer, who was convicted in June and nicknamed "Octopussy" due to the number of connections he had, was sentenced to ten years in prison.
Given Mr. Rajaratnam’s role in the conspiracy, the Government had argued that Mr. Rajaratnam should be given a sentence "within the applicable Guidelines range of 235 to 293 months" (in other words between approximately 19 to 24 years. Mr. Rajaratnam has argued that such a sentence was "grotesquely severe," and pointed out that the average sentence imposed in 2010 for violent crimes were far less – the average sentence for manslaughter was 73 months, for example.
The Wall Street Journal reported that during today’s hearing Judge Holwell said Mr. Rajaratnam’s ill health (he is suffering from advanced diabetes and likely to require a kidney transplant) justified some leniency in sentencing.