This post was written by Amy J. Greer.
After his conviction on 14 counts of securities fraud and conspiracy in what has been described as the biggest insider trading case ever – and, by his defense counsel, John Dowd as a “victory,” since he didn’t get convicted on all counts – today Galleon founder Raj Rajaratnam was sentenced to 132 months, or 11 years in prison, for his massive insider trading scheme.
This sentence represents the longest of the string of sentences handed down this year in connection with this trading ring. Former hedge fund trader Zvi Goffer, another link in the conspiracy’s chain, was sentenced on September 21, 2011 to 10 years, so it was widely expected that Raj would get a longer term.
Prior to sentencing, in an effort to reduce the sentencing guideline range, a complex calculation that takes many factors into consideration – but probably most important here, the amount at issue as a result of the unlawful trading – Raj’s lawyers made pitches to the court in an effort to reduce the ill gotten gains or losses avoided. The prosecution’s numbers were in excess of $70 million; the defense was at under $8 million. There was also much discussion about Rajaratnam’s health issues, also a potential consideration for a sentencing court.
Given that Raj was looking at a sentence in excess of 20 years, perhaps this is where his defense team can finally claim some actual victory. While the crimes for which they were convicted differ, the treatment of white collar criminal defendants in the financial fraud/securities area are often compared and, after all, Dennis Kozlowski is doing 8 to 25 in New York State prison, Jeffrey Skilling, who won at the United States Supreme Court, is doing more than 24 years in a federal penitentiary; more recently, Lee Farkas got 30 years for a mortgage fraud scheme, and then, of course, there’s Madoff’s 150 year sentence.