Rajaratnam gets 11-yr sentence, less than US sought

NEW YORK, (Reuters) – Raj Rajaratnam, a self-made  hedge fund tycoon convicted in the biggest Wall Street trading  scandal in a generation, was ordered to serve 11 years in  prison, the longest sentence ever in an insider-trading case  but far less than prosecutors sought.

Raj Rajaratnam

Yesterday’s sentencing caps a prosecution, marked by secret  wiretaps of Rajaratnam and his associates, that shocked the  investment world. The Sri Lanka-born fund manager once stood  atop a $7 billion New York hedge fund, but was found guilty of  running a network of informants who supplied him with corporate  secrets.

The sentence was lighter than the 19-1/2 year minimum term  that prosecutors had sought, and was only slightly more than  the 10 years handed down recently to a former Rajaratnam  employee at the now-shuttered Galleon Group hedge fund.

The judge, in rejecting calls for a tougher sentence, said  Rajaratnam, 54, faces “imminent kidney failure” due to advanced  diabetes. He referred to a report from the defense describing  Rajaratnam’s doctors as recommending dialysis soon. The report  said the doctors had begun the process for obtaining a kidney  transplant.

“Prison creates a more intense form of punishment for  critically ill prisoners,” U.S. District Judge Richard Holwell  said. He added, however, that illness does not provide “a  get-out-of-jail-free card.”

The judge also cited the multimillionaire’s charitable work  including helping victims of natural disasters in Sri Lanka,  Pakistan and in the United States.

Rajaratnam, standing with his lawyers and looking straight  ahead, was expressionless after hearing the sentence. Before  the judge announced his ruling, Rajaratnam said “No thank you,  Your Honor,” when asked if he wanted to make a statement.

Rajaratnam’s lawyers, whose client showed no obvious signs  of poor health during the 80-minute hearing yesterday, have  said that a long prison term would amount to a death sentence.

Around the Web