Wall Street tycoon jailed for 11 years over insider deals

Raj Rajaratnam, a hedge-fund tycoon convicted in the biggest Wall Street trading scandal in a generation, was ordered yesterday to serve 11 years in jail.
By The Newsroom
Published 14th Oct 2011, 01:04 BST

The sentence caps a prosecution, marked by secret wiretaps of Rajaratnam and his associates, that shocked the investment world. Rajaratnam once ran a $7 billion (£4.4bn) hedge fund, but was found guilty of running a network of informants who provided him with corporate secrets.

US district judge Richard Holwell said 54-year-old Rajaratnam suffers from “advanced diabetes,” which he said may lead to kidney failure and a possible kidney transplant, factors taken into account in sentencing.

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The judge also fined him $10m and ordered him to forfeit $53.8m after his conviction for 14 securities fraud and conspiracy charges in May following a two-month trial.

Rajaratnam’s crimes, discovered in October 2009, touched top US companies, including Goldman Sachs, Intel, IBM and the McKinsey consultancy.

Prosecutors called Rajaratnam the “modern face” of insider trading, bracketing him alongside previous Wall Street insider dealers Ivan Boesky and Michael Milken, principal figures in a mid-1980s case. Both men served about two years in prison for their crimes.