NEW YORK?? A judge cited the "huge and brazen" nature of the crime Tuesday as he imposed a record $92 million civil penalty on a billionaire hedge fund boss snared in the biggest insider trading case ever.
U.S. District Judge Jed Rakoff ordered the penalty for Raj Rajaratnam, saying his insider trading scheme "cries out for the kind of civil penalty that will deprive" him of a material part of his fortune, which at one time made him one of the world's wealthiest men, with well more than a billion dollars. His attorneys have said he is no longer a billionaire.
Rajaratnam was convicted this year of insider trading and was sentenced last month to 11 years in prison. In the criminal case, he was also fined $10 million and ordered to forfeit $53.8 million in what the judge said were illicit profits from trading on confidential corporate information. He is scheduled to report to prison in December.
Prosecutors said he earned as much as $75 million in illegal profits in a case that resulted in more than two dozen convictions. They said he acted on secrets he got from friends and colleagues in the securities industry and at public companies.
In a release out of Washington, the Securities and Exchange Commission said the $92.8 million civil penalty against Sri Lanka-born Rajaratnam was the biggest ever for widespread insider trading by an individual in an SEC case.
"The penalty imposed today reflects the historic proportions of Raj Rajaratnam's illegal conduct and its impact on the integrity of our markets," said Robert Khuzami, director of the SEC's Division of Enforcement.
In all, the SEC has pursued more than $90 million in illicit profits or losses avoided by 29 individuals and entities including hedge fund advisers, Wall Street professionals and corporate insiders.
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AP Business Writer Marcy Gordon in Washington contributed to this report.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Source: http://www.msnbc.msn.com/id/45212307/ns/business-us_business/
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