David Siegal in The New York Times: Rajaratnam Is Sentenced to 11 Years
The fallen hedge fund billionaire Raj Rajaratnam received on Thursday the longest-ever prison sentence for insider trading, a watershed moment in the government’s aggressive two-year campaign to root out the illegal exchange of confidential information on Wall Street.
Judge Richard J. Holwell sentenced Mr. Rajaratnam, the former head of the Galleon Group hedge fund, to 11 years in prison. Mr. Rajaratnam was also fined $10 million. A jury convicted him of securities fraud and conspiracy in May after a two-month trial...
For the first time in an insider-trading inquiry, the government used wiretaps to secretly record the phone conversations of hedge fund traders. Mr. Rajaratnam’s cellphone was tapped for nine months during 2008, yielding reams of damning evidence that were used against him at trial.
“One legacy of this case that Wall Street will be more careful about what they say on telephones than they used to be,” said David Siegal, a white-collar defense lawyer and former federal prosecutor at Haynes and Boone.
Excerpt from The New York Times, Oct. 13, 2011.