One of the more sinister figures in the Wall Street scandals, disgraced hedge fund manager Raj Rajaratnam, was sentenced in Manhattan federal court to 11 years in prison today. He was also fined $63 million.
Prosecutors described his trail of fraud and deception as the largest hedge fund insider trading scheme in history, and Rajaratnam got the longest sentence ever imposed for insider trading. (Maybe that’s a story in itself: 11 years isn’t a lot compared to the misconduct.)
In full hue and cry, U.S. Attorney Preet Bharara declared that Rajaratnam fell from the “summit of Wall Street, his empire exposed as a web of fraud and corruption that entangled many.”
He added he hoped the case would be a wake up call that “privileged professionals do not get a free pass to pursue profit through corrupt means.”
Rajaratnam ran the Galleon Group. For six years, he used inside information from people at companies like Goldman Sachs, Intel, IBM, McKinsey, Moodys and earned well over $50 million from this trading.
The question now is not what Rajaratnam did, but how common it is across the hedge fund industry.