Convicted insider trader Raj Rajaratnam was hit with a $92.8 million penalty yesterday as Southern District Judge Jed S. Rakoff (See Profile) granted summary judgment for the Securities and Exchange Commission in the parallel civil case against the Galleon Group hedge fund founder. Noting that the one-time billionaire’s net worth is still far in excess of the financial penalties imposed in October in the criminal case and taking into account “the huge and brazen nature” of Mr. Rajaratnam’s insider trading scheme, Judge Rakoff said that “this case cries out for the kind of civil penalty that will deprive this defendant of a material part of his fortune.”
Mr. Rajaratnam, 54, was convicted in May of five insider conspiracies and nine counts of securities fraud for trading on or passing along material non-public information on Intel, Goldman Sachs and other entities. Last month, Judge Richard J. Holwell (See Profile) sentenced him to serve 11 years in prison, ordered him to forfeit $53.8 million and pay an additional $10 million in criminal penalties (NYLJ, Oct. 14).
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