Raj Rajaratnam, a self-made hedge-fund tycoon convicted of fraud and conspiracy in the biggest Wall Street trading scandal in a generation, has been ordered to serve 11 years in prison, one of the longest sentences on record in an insider-trading case.
US District Judge Richard J Holwell announced the sentence in Manhattan on Thursday after concluding that Rajaratnam made well over $50m in profits from his illegal trades.
Rajaratnam’s profits had been placed at between $70m and $75m by case prosecuters who had sought a prison sentence of at least 19-and-a-half years.
“His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated,” Holwell said.
Holwell also ordered the Galleon Group founder to pay a $10m fine for his crimes.
Prosecutors said Rajaratnam was the central figure in a sweeping criminal case that touched some of the top companies in the US including investment bank Goldman Sachs, consultants McKinsey & Co and technology giants Intel and IBM.
Al Jazeera’s Kristen Saloomey, reporting from New York, said: “The prosecution wanted to send a tough message.”
However, the judge took Rajaratnam’s bout with advanced diabetes and need for a kidney transplant into consideration in his sentencing.
He also credited his charity work, which he called “the defendant’s responsiveness to and care for the less privileged”.
The judge cited Rajaratnam’s work to help victims of the earthquake in Pakistan and the attacks on September 11 in New York, among others.
Saloomey said that the prosecution did not get the sentence that they had asked for, but that Rajaratnam had still received “the stiffest sentence in decades for an insider trading case”.
Prosecutors have called Rajaratnam, 54, the “modern face” of insider trading, putting him alongside among dubious Wall Street power players such as takeover specialist Ivan Boesky and junk bond financier Michael Milken, principal figures in a mid-1980s insider-trading case.
Both men served about two years in prison.
Thursday’s sentencing culminates a series of convictions and sentencings that followed the October 2009 announcement of Rajaratnam’s arrest.
More than two dozen people were arrested; all were convicted. The other defendants received sentences ranging from a few months to 10 years.
Saloomey said the case had had “a chilling effect on Wall Street”.
“Certainly the case was closely watched by financial insiders who saw this as something that affects their daily business,” she said.
“Two-dozen defendants were convicted related to the Galleon Group case … Also, the case touched on several major American companies like Intel and Goldman Sachs, who were also affected by the case – so some would say that it is already having a major impact on how they do business.”
Rajaratnam’s sentencing comes as the nearly month-old Occupy Wall Street protests continue, sending daily messages opposing what critics see as greed and corporate excess in the financial sector.