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Friday, November 11, 2011 - 05.06 GMT |
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Rajaratnam to pay $92m penalty in insider
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A US judge has ordered Raj Rajaratnam to pay USD 92 million as penalty in the biggest insider trading case in the US, saying the "huge and brazen nature" of his fraud "cries out" for such an unprecedented fine.
Judge Jed Rakoff of the US District Court for the Southern District of New York entered his final judgment yesterday finding Rajaratnam liable for a civil monetary penalty of USD 92,805,705, the largest penalty ever assessed against an individual in an insider trading case of Securities and Exchange Commission.
In the criminal case against Rajaratnam, the Sri Lankan hedge fund founder was ordered to pay more than USD 53.8 million in forfeiture of illicit gains and USD 10 million in criminal fines. The total amount of monetary sanctions imposed on Rajaratnam in the civil and criminal cases now stands at more than USD 156.6 million.
In imposing the fine, Rakoff said such a severe civil penalty will bring home the message that insider trading should be "a money-losing proposition" for anyone who plans to engage in it. He said the penalty is further justified given Rajaratnam's networth which "considerably exceeds" the penalties in the criminal case.
"When to this is added the huge and brazen nature of Rajaratnam's insider trading scheme, which, even by his own estimate, netted tens of millions of dollars and continued for years, this case cries out for the kind of civil penalty that will deprive this defendant of a material part of his fortune," Rakoff said in his judgment.
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