Raj given 11 years for insider tradingOctober 13, 2011: 11:29 AM ET
Judge Richard Holwell today sent a major rebuke to those who think insider trading is a minor crime, or that it shouldn't be a crime at all. The federal jurist sentenced former hedge fund manager Raj Rajaratnam to more than 11 years in prison, which represents the longest sentence ever handed out for insider trading in the United States.
Rajaratnam had been convicted by a jury back in May on 14 counts of securities fraud and conspiracy, based on an elaborate network of tipsters that helped him and his Galleon hedge fund trade on non-public information.
For example, Galleon made around $17 million in profits by trading shares of Goldman Sachs (GS), thanks to information gleaned from a back-channel relationship with then-Goldman board member Rajat Gupta. The pair also used to work together at an India-focused private equity firm. The SEC recently dropped the administrative action it had brought against Gupta (who strongly denies the allegations), but remains free to refile its charges in federal court.