Another character in the insider trading scandal involving Raj Rajaratnam [at right] was sentenced yesterday, and once again the sentence appeared fairly light.
Michael Cardillo, a former portfolio manager with Rajaratnam’s Galleon Group, got no prison, but three years of probation, probably in part for his agreement to testify in the criminal trials of Rajat Gupta, a former director at Goldman Sachs, and Zvi Goffer, another former portfolio manager at Galleon. He also has to forfeit $291,000. On Wednesday, Gupta was sentenced to just two years for passing inside info to Rajaratnam.
Cardillo didn’t know the source for Rajaratnam’s information, but he was aware that he was getting confidential tips on key corporate moves. In 2007, he traded on information about 3Com Corp., Axcan Pharma, Kronos Inc and Hilton Hotels Corp. In 2008 and 2009, he traded on confidential info about JM Smucker Company and Proctor and Gamble. Gupta was also a director at Proctor and Gamble and passed information about the company to Rajaratnam.