Hedge fund billionaire gets 11 years for insider trading

Hedge fund billionaire Raj Rajaratnam has received the longest ever prision sentence for insider trading after he was jailed for 11 years in a landmark ruling in the US today.

Judge Richard J. Holwell sentenced Rajaratnam, a hedge fund tycoon who managed the Galleon Group hedge fund, in a ruling being described as a ‘watershed moment' in the US government's attempts to clean up Wall Street.

The sentence comes after Rajaratnam, whose hedge fund grew to $7bn in size at its peak, was convicted of securities fraud and conspiracy by a jury in May after a two-month trial.

Rajaratnam was found guilty of exchanging illegal stock tips about companies including Goldman Sachs and Google with corporate insiders and fellow traders.

The US government had placed Rajaratnam at the heart of what it dubbed the largest ever hedge fund insider dealing case.

The trading generated profits of more than $60 million, according to the government.

It is a remarkable fall from grace for Rajaratnam who had a net worth of $1.5bn in 2009, according to Forbes magazine.

Prosecutors believe the sentence could have been more severe and called for Rajaratnam to be jailed for 19 years.

His lawyer, John Dowd, is expected to appeal for a lesser term, after arguing a stiff penalty for Rajaratnam would be on par with the average sentences for violent crimes like kidnapping and sexual abuse.