Raj Rajaratnam could get the longest insider trading sentence in history – 24 years in prison – if federal prosecutors have their druthers. Observers say Rajaratnam’s punishment will serve as a litmus test for whether the crime of insider trading warrants a lengthy stay in Club Fed.
Raj Rajaratnam: Convicted
This past May, a jury convicted Rajaratnam, the former head of the hedge fund Galleon Group, of 14 counts of conspiracy and securities fraud. Prosecutors and wiretapped phone calls painted Rajaratnam as the center of a global network of insiders, who passed information to him. The illegal stock trades allegedly yielded him about $64 million.
Raj Rajaratnam: Sentences for Securities Fraud Increase in the Age of Greed
Since the 1980s, prison terms for white-collar criminals have increased to keep up with the value of their illegal trades and securities fraud. Whether Raj Rajaratnam’s stay will exceed the average federal prison term for murder will likely be decided next week.