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article imageHedge-fund manager gets longest sentence for insider trading

By Joan Firstenberg     Oct 14, 2011 in Crime
New York - Raj Rajaratnam, a self-made hedge-fund tycoon convicted of fraud and conspiracy in Wall Street's biggest trading scandal in a generation, will be serving 11 years in prison, which is one of the longest sentences on record in an insider-trading case.
At the top of his game, hedge-fund manager Raj Rajaratnam raked in over $72 million by using illegal tips to trade in stocks of companies including Goldman Sachs, Intel, Google, ATI Technologies and Clearwire.
But the entire house of cards came tumbling down in what investigators now call the largest hedge fund insider-trading case in U.S. history. The probe leveraged a wide array of FBI wiretaps for the first time in such an inquiry, leading to the convictions of more than two dozen people.
Bloomberg News reports that Rajaratnam may serve his 11-year sentence at a North Carolina prison whose inmates include Ponzi scheme mastermind Bernard Madoff, corporate looter John Rigas and blind terrorist leader Sheikh Omar Abdel Rahman.
Rajaratnam was also ordered to pay the courts a $10 million fine for his crimes
Al Jazeera reports that prosecutors called Rajaratnam the "modern face" of insider trading, putting him in the group of a widening pantheon of wicked Wall Street power players like takeover specialist Ivan Boesky and junk bond financier Michael Milken, both principal figures in a mid-1980s insider-trading case. Both men served two years in prison.
Presiding U.S. District Judge Richard Holwell said he will be recommending that the Galleon Group LLC co-founder be sent to the federal medical center in Butner, North Carolina, because of The 54-year old Rajaratnam’s health problems, which include advanced diabetes, high blood pressure, high cholesterol, sleep apnea, and possible kidney failure which will likely require a transplant.
Alan Ellis, former present of the National Association of Criminal Defense lawyers says about the Butner medical center,
“It’s the crown jewel of the federal prison system. It’s a very well-run facility.”
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