NEW YORK - Galleon Group co founder Raj Rajaratnam is the most “egregious violator’’ of insider-trading laws ever to be caught and should spend as long as 24 years and five months in prison, US prosecutors said.
Lawyers for Rajaratnam, in a separate court filing yesterday, asked the judge for a prison term “substantially below’’ what federal guidelines recommend. His attorneys cited Rajaratnam’s poor health, urging US District Judge Richard Holwell in Manhattan not to force their client to die in prison.
Rajaratnam, 54, was convicted in May of all 14 criminal counts of conspiracy and securities fraud he was charged with. He is scheduled to be sentenced on Sept. 27. Prosecutors said he should serve at least 19 years, seven months in prison.
“Rajaratnam repeatedly leveraged the power of money and his position as the head of a $7 billion hedge fund to induce friends, employees and associates to participate in his criminal activities,’’ Justice Department lawyers said in their sentencing memorandum yesterday. “He is the modern face of illegal insider trading.’’
Prosecutors said Rajaratnam engaged in a seven-year conspiracy to trade on inside information from corporate executives, bankers, consultants, traders and directors of public companies including Goldman Sachs Group. He gained $63.8 million as a result of the scheme, according to the government.
Rajaratnam used the information to trade ahead of public announcements about earnings, forecasts, mergers, and spinoffs involving more than a dozen companies, according to evidence presented during his trial. Among the companies were Intel Corp., Google Inc., ATI Technologies Inc., and Clearwire Corp.
Prosecutors and defense lawyers are awaiting a presentencing report from the federal probation office to help determine a range under US sentencing guidelines, according to yesterday’s filing by John Dowd, the lead lawyer for Rajaratnam. Holwell is free to disregard the guidelines, which are advisory.
The defense argued that Rajaratnam’s crimes are “not in the same league’’ as those committed by executives at Enron Corp. or WorldCom Inc., a few of whom were sentenced to more than 20 years in prison, “since those defendants betrayed their own shareholders and employees.’’
“Mr. Rajaratnam is not a healthy man,’’ his lawyers wrote, citing “significant and challenging medical issues’’ that are known to the court’s probation department.