Raj Rajaratnam (54), the billionaire hedge fund manager convicted in May on 14 counts of securities fraud and conspiracy, this week faces a range of possible jail terms from 19 years and seven months to 24 years and six months as per recommendations of prosecutors in the case against him in New York.
Prior to sentencing, which will occur on October 13, prosecutors pressed for a longer jail term given current federal sentencing guidelines and the “historic nature of his crimes,” from which they alleged Mr. Rajaratnam made in excess of $70 million.
However, according to his own legal team the Sri-Lankan born boss of the Galleon Group allegedly made “only $7.4 million” from insider trading and such illicit market activities. They pleaded for no more than six to eight years.
In particular Terence Lynam, Mr Rajaratnam’s attorney was said to have argued that the government was “sweeping in all market movements,” and that they disputed the government’s calculation of the profits that Mr. Rajaratnam made.
Specifically the prosecution’s methodology included “trades that were made after the time when the news of earnings or a takeover was announced,” reports said, noting that in some instances, Mr Rajaratnam “did not sell his entire stake on the day of the news.”
Yet according to reports if the judge’s request to assume Mr. Rajaratnam sold his entire position on the day of the news was followed then his total profits still exceeded $50m. “Under the sentencing guidelines, one threshold for gains is $50m to $100m, so that change would not alter the government’s sentencing recommendation,” reports said.
Instead, prosecutors argued, Mr. Rajaratnam ought to serve between 235 and 293 months, or a minimum sentence of 19 years and seven months, based on the fact that he was a “serial insider trader” who headed a major conspiracy and obstructed the government’s investigation during an interview with the Securities and Exchange Commission.