Judge fines Rajaratnam USD 92 million

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A judge cited the 'huge and brazen' nature of the crime as he imposed a record USD 92 million civil penalty on billionaire hedge fund boss Raj Rajaratnam snared in the biggest insider trading case ever.

U S District Judge Jed Rakoff yesterday 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 USD 10 million and ordered to forfeit USD 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 USD 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 USD 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 USD 90 million in illicit profits or losses avoided by 29 individuals and entities including hedge fund advisers, Wall Street professionals and corporate insiders.