Oct. 11 (Bloomberg) -- Galleon Group LLC co-founder Raj Rajaratnam, the central figure in the biggest hedge fund insider-trading prosecution in history, disputed prosecutors’ claim that he deserves an enhanced sentence for leading five or more people in crime.
“There is simply no evidence that Mr. Rajaratnam led any of these individuals in connection with criminal activity -- much less that he led all of them -- much less that he did so with specific criminal intent,” Rajaratnam’s lawyers said in a filing yesterday in federal court in Manhattan. They were responding to a government claim that he directed nine Galleon back-office employees and outside fund managers in one of the conspiracies.
Prosecutors filed papers Oct. 7 arguing that Rajaratnam’s insider-trading schemes involved five or more people, including knowing and unknowing participants.
Rajaratnam, who is to be sentenced by U.S. District Judge Richard Holwell Oct. 13, also argued yesterday that the government had failed to show he obstructed justice by lying to the U.S. Securities and Exchange Commission, which merits an additional sentence enhancement, according to prosecutors.
Rajaratnam, 54, was convicted in May of 14 counts of securities fraud and conspiracy. Prosecutors, saying he made $72 million from his crimes, asked for a prison term of 19 years and seven months to 24 1/2 years, which Rajaratnam’s lawyers called “grotesquely severe.”
The case is U.S. v. Rajaratnam, 09-01184, U.S. District Court, Southern District of New York (Manhattan).
--Editors: David E. Rovella, Glenn Holdcraft
To contact the reporters on this story: Bob Van Voris in New York at firstname.lastname@example.org; Patricia Hurtado in New York at email@example.com
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org