Galleon Group, LLC co-founder Raj Rajaratnam was sentenced to 11 years in prison today, the longest prison term doled out for insider trading thus far. He could have received up to 24 years, but his attorneys argued that he was suffering poor health, which helped to migitate his sentence. His severe diabetes is leading to renal failure.
The 54-year-old, disgraced former leader of the Galleon Group Hedge fund must forfeit $53.8 million, an amount equal to his gains from insider trading. Judge Richard Howell also fined him $10 million. How many readers have ever seen that kind of money? Rajaratnam symbolizes part of the reason "Occupy Wall Street" has gained so much ground, although his crime did not steal money from investors, like that of Bernie Madoff, who bilked investors of over $50 billion.
Judge Howell declared, "His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated." Ham on Wry agrees and believes that Howell's statement describes the essence of the malaise that afflicts current operating models of many businesses in America. It seems many executives receive their rewards without the risk of loss from negative outcomes.
Preet S. Bharara, the United States attorney in Manhattan has championed government crackdowns on insider trading. The sweeping insider trading probe, begun in 2009, has charged 49 people, with most being convicted. He also played a significant role in bringing charges yesterday against Manssor Arbabsiar, one of the alleged masterminds of an Iranian plot to assassinate the Saudi Ambassador to the United States.
Ham on Wry wishes that the successes of government attorneys could spill over into the chambers of the United States Congress, where it's all talk and no action.
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