Raj Rajaratnam, the billionaire hedge fund manager who was convicted of insider trading in May, is fighting to lower his estimated prison sentence, 12 to 24.5 years.
But it might be counter-productive.
Prosecutors say that what Rajaratnam said in an interview with a court probation officer who’s proposing what his sentence should be to the judge “[reflects] a serious disregard for the law” and warrants a harsher sentence. They’re seeking 19.5 to 24.5 years.
Here’s what he said, from Bloomberg:
Rajaratnam … told a court official that he wasn’t “clear” on “the line between permissible ‘detective work’ and impermissible insider trading,” prosecutors said…
“In my own mind, the line between permissible ‘detective work’ and impermissible insider trading was not always clear, especially with regard to companies broadly covered by the news media as to which there was a wealth of publicly available information, including frequent leaks, rumours and speculation about corporate transactions and other important developments.”
[No one was harmed by my trades.]
“I am not aware of anyone who lost money as a result of my actions presented to the jury… The trades at issue were made in liquid stocks with market makers. They were not made with individual investors who would have refrained from trading but for my purchases and sales… All of Galleon’s investors were made whole after Galleon closed down.”
Prosecutors are using the comments, which he was not required to make, against Rajaratnam.
…Prosecutors excerpted some of his comments to the probation officer while telling U.S. District Judge Richard Holwell in New York that they show Rajaratnam “remains defiant.”
Prosecutors said the comment shows that Rajaratnam has “absolutely no appreciation” that he “cheated the system.”
Therefore he should get 19.5 to 24.5 years, they say.
Our take is, this only makes it more likely that Raj will run. If he felt bad about what he did, he might be able to reconcile over a decade in jail. The fact that he doesn’t suggests he is having an extremely hard time coming to terms with his upcoming jail time. For more on why he believes he traded on confidential – not material – information, and used detective work to form a “mosaic theory,” here’s his defence of some of his trades.
Most people we polled think he’ll run too. He has the money. As long as he can figure out how to get out without a passport, and how to get the electronic monitoring bracelet off, he’s set.
If he doesn’t, Rajaratnam will be sentenced on September 27.
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