As the Occupy movement retains its momentum, Raj Rajaratnam, a 54-year-old billionaire, has been convicted of insider trading. The white collar crime he stood accused of, warrants two years in prison, according to a former federal prosecutor. His conviction brought with it an 11-year prison sentence that was not as harsh as prosecutors would have liked, according to reports, but is much stronger than the sentence the man would have likely received ten years ago.
The head of a highly valued hedge fund, the 54-year-old man had allegedly been using informants in big-name companies like Hilton, Google, Intel and Goldman Sachs. The federal government, during his prosecution, found that he had been learning about earnings and corporate deals from individuals as high up as corporate board members. His scheme allowed the hedge fund to save a lot of money from being lost and gave it the ability to make more profit than without information Raj illicitly acquired. It is estimated the scheme earned the hedge fund more than $70 million.
Along with his 11-year prison sentence, the head of the hedge fund in question will be required to pay a $10 million fine. He will also have to return more than $50 million. Though he has been convicted, he has posted his $100 million bail and will be required to report to prison to begin his sentence in late November. Some officials are worried that the man will attempt to flee to his home country of Sri Lanka. If he travels to Sri Lanka, experts believe it will be easier for him to access his money.
His lawyers were hoping to have him serve the sentence in the same facility that Bernie Madoff, convicted Ponzi-scheme billionaire, is serving his longer-than-a-century sentence. The 54-year-old Sri Lankan plans on appealing his case, according to a spokesperson.
Source: The Washington Post, “Raj Rajaratnam, hedge fund billionaire, gets 11-year sentence for insider trading,” David S. Hilzenrath, Oct. 13, 2011