Bloomberg News

Rajaratnam Gets Passport, Money Back After Entering Prison

December 13, 2011

(Updates with SEC fine in sixth paragraph.)

Dec. 12 (Bloomberg) -- Raj Rajaratnam, the former hedge- fund manager serving an 11-year prison sentence for insider trading, can have his passport back, along with the title to his $17.5 million Manhattan apartment and $2.5 million in cash.

Rajaratnam, 54, the Galleon Group LLC co-founder, reported to a federal medical prison in Ayer, Massachusetts, Dec. 5 to begin serving his sentence. U.S. District Judge Richard Holwell agreed with prosecutors that Rajaratnam’s assets, which secured his $100 million bond, should be returned.

“The defendant has fulfilled all the conditions of the appearance bond and he is currently in the custody of the Bureau of Prisons serving his sentence,” lawyers for Rajaratnam and the government said in an agreement endorsed by Holwell Dec. 9 and released today.

Rajaratnam was convicted in May of directing the biggest insider-trading ring in a generation. His was the longest sentence ever handed down for such a crime and the culmination of a four-year nationwide probe of insider trading. A three- judge panel rejected his last-minute plea to remain free while he appeals his conviction.

In addition to his prison sentence, Rajaratnam was ordered to pay a $10 million fine and forfeit $53.8 million. He must also pay $92.8 million in a civil case filed by the U.S. Securities and Exchange Commission, the biggest fine assessed against an individual in an insider trading case, according to the agency.

The criminal case is U.S. v. Rajaratnam, 09-01184, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Andrew Dunn, Mary Romano

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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