NEW YORK (Reuters) - Prosecutors asked a federal judge to sentence Raj Rajaratnam to as much as 24-1/2 years in prison, calling the Galleon Group hedge fund founder “arguably the most egregious violator” of insider trading laws ever to be caught.
Rajaratnam, who was convicted of insider trading in May, should receive a sentence of between 235 to 293 months, or roughly 19-1/2 to 24-1/2 years, said prosecutors in a court filing Tuesday evening.
“Raj Rajaratnam’s criminal conduct was brazen, arrogant, harmful, and pervasive,” said the filing. “He corrupted subordinates. He corrupted entire markets. Day after day, month after month, year after year, Rajaratnam operated as a billion-dollar force of deception and corruption on Wall Street.”
Prosecutors argued that the sentence they seek, which they said is in accordance with the federal guidelines, is needed to reflect the seriousness of Rajaratnam’s criminal activity and to “deter others -- particularly in the hedge fund and money management world from engaging a crime that is far too rampant.”
A spokeswoman for Rajaratnam declined to comment on the government’s filing.
In an earlier filing on Tuesday, lawyers for Rajaratnam sought a sentence “substantially below” what U.S. guidelines recommend, saying a long prison term would be tantamount to a death sentence.
Lawyers for the 54-year-old Rajaratnam said such a sentence would be unfair and overstate the seriousness of the offense.
“Mr. Rajaratnam’s failing health and the unique constellation of ailments ravaging his body mean, quite simply, that a lengthy period of imprisonment will constitute a death sentence and result in the permanent and final separation of Mr. Rajaratnam from his family,” said the filing.
U.S. District Judge Richard Holwell is expected to sentence Rajaratnam on September 27 and need not follow the federal guidelines.
In the memo, lawyers for Rajaratnam also sought to portray him as a philanthropist who has made a positive contribution to society. They noted he had donated more than $45 million of his personal wealth to charitable causes.
They also pointed to letters provided by Rajaratnam’s friends, family, business colleagues and others that they say “describe a man remarkable for his kindness, quiet manner, lack of pretense, and boundless generosity.”
One letter they cited came from a childhood friend from Sri Lanka, where Rajaratnam was born as the second oldest of five children and the son of a business executive and homemaker.
The letter said that as a boy Rajaratnam would help families with household chores in exchange for a monetary contribution to charities he was involved with.
“I remember my mother looking out of the window and feeling amazed by this boy born with a silver spoon in his mouth working our lawn in sweltering Colombo heat to raise a few rupees for his cause,” the letter said.
Rajaratnam’s lawyers argued that the evidence submitted to the court “bears scant resemblance to the greedy criminal kingpin the government attempts to portray.”
Rajaratnam was found guilty on five counts of conspiracy and nine counts of securities fraud in May.
Prosecutors accused him of trading on inside information from corporate executives, traders and others, resulting in $63.8 million of illegal profit.
The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
Editing by Richard Chang, Steve Orlofsky and Bernard Orr