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Rajaratnam to settle insider trading case

New York, Dec. 27: The former hedge fund titan at the centre of the federal government’s crackdown on insider trading has agreed to pay $1.45 million to settle a civil case filed against him by the Securities and Exchange Commission.

Raj Rajaratnam, who is serving an 11-year prison term for his criminal conviction on insider trading charges, agreed to pay nearly $1.3 million representing the profits he gained and losses he avoided as a result of illegal stock tips, according to a judgment filed in Manhattan federal court late on Tuesday.

He also agreed to pay nearly $148,000 in pre-judgment interest, with the combined payments due within 90 days.

The Galleon Group co-founder was convicted last year on 14 counts of insider trading in what federal prosecutors alleged was the largest hedge fund insider-trading scheme in US history. The sprawling case featured secret wiretaps that depicted him receiving confidential earnings data and other non-public information from a web of company insiders and others.

Rajaratnam, 55, is serving his sentence at the Devens Federal Medical Center in Massachusetts while he continues an appeal of the criminal conviction, federal Bureau of Prisons records show.

Separately, Rajaratnam is also appealing a $92.8 million civil penalty imposed by the SEC. His attorneys have argued that he should not face a civil case penalty because he was already ordered to pay a $10 million fine and forfeit more than $53 million as the result of his criminal conviction.

His challenge to the civil penalty is on hold, pending the outcome of the appeal of his criminal conviction, federal court records show.

 
 
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