Galleon Group founder Raj Rajaratnam also was fined $10million and ordered to forfeit $53.8 million by U.S. District Judge Richard J.Holwell, who said he concluded that Rajaratnam made well over $50 million inprofits from his illegal trades.
"His crimes and the scope of his crimes reflect a virusin our business culture that needs to be eradicated," Holwell said."When the integrity of the marketplace is called into question, the publicsuffers."
The Sri Lanka-born Rajaratnam, 54, was ordered to report toa yet-to-be-designated prison on Nov. 28. His lawyers asked that he be allowedto report to the medical facility at the Butner Federal Correctional Complex inNorth Carolina, where Bernard Madoff is serving his 150-year sentence afteradmitting to a fraud that cheated thousands of people out of billions ofdollars.
The judge gave Rajaratnam leniency, citing his need for akidney transplant and his advanced diabetes. And he credited Rajaratnam'scharity work, which he called "the defendant's responsiveness to and carefor the less privileged." The judge cited Rajaratnam's work to help victimsof the earthquake in Pakistan and Sept. 11, among others.
Asked if he wished to speak, Rajaratnam said only, "Nothank you." He has been a quiet presence at all his court proceedings,declining even to sit at the defense table during his trial. When he stepped offthe elevator on the floor of his courtroom Thursday, he was carrying a waterbottle and casually asked no one in particular: "Which way?"
The sentencing culminates a series of convictions andsentencings that followed the October 2009 announcement of Rajaratnam's arrest.More than two dozen people were arrested; all were convicted. The otherdefendants got sentences ranging from a few months to 10 years.
The probe relied heavily on the most extensive use ofwiretaps ever for a white-collar case, capturing conversations in whichRajaratnam and his co-conspirators could be heard gleefully celebrating theirinside information.
Assistant U.S. Attorney Reed Brodsky told Holwell before thesentence was announced that Rajaratnam made up to $75 million in illegalprofits from insider trading he indulged in since at least the late 1990s as heled one of the world's largest hedge funds. The government has said he switchedso much money around within his multibillion dollar funds that the movement ofprice in individual stocks could be traced to his trading whims.
"Today you sentence a man who is the modern face ofillegal insider trading," Brodsky told Holwell. "He is arguably themost egregious insider trader to face sentencing in a courthouse in the UnitedStates."
The prosecutor said Rajaratnam went about his crime in a"brazen, pervasive and egregious" manner, corrupting at least 20fellow traders and at least 16 insiders with a lust for the millions of dollarsthat can flow to anyone who gets an edge in the securities markets. He said atleast 19 public companies were victims of his crimes.
"The duration of his crimes was extraordinary,"Brodsky said.
Prosecutors had asked Holwell to send Rajaratnam to prisonfor at least 19½ years for his May conviction on securities fraud charges. Theysaid federal sentencing guidelines called for up to 24½ years. A ProbationDepartment report recommended a 15-year sentence.
The defense asked for leniency partly based on Rajaratnam's"failing health" and his "unique constellation ofailments."
Attorney Terence Lynam told Holwell that Rajaratnam shouldreceive credit for his considerable charitable works and he urged compassionfor his illnesses.
"Any lengthy term of imprisonment will surely shortenhis life," he said. "Based on the conduct for which he was convicted,he does not deserve to die in prison."
Lawyers for the Sri Lanka native argued for 6½ to 9 years.They said the illegal profits actually total around $7 million, when the tradesat his Galleon Group are disregarded.
In a statement, U.S. Attorney Preet Bharara recalled tellingan audience when he announced charges against Rajaratnam two years ago that thecase was a wake-up call for Wall Street.
"We can only hope that this case will be the wake-upcall we said it should be," he said in the statement Thursday. "It isa sad conclusion to what once seemed to be a glittering story. ... Privilegedprofessionals do not get a free pass to pursue profit through corruptmeans."
In another statement, FBI Assistant Director-in-ChargeJanice K. Fedarcyk said Rajaratnam was no different from so many others whoclaim "superior research and acumen" gave them superior results inthe stock markets.