A US judge has ordered disgraced billionaire Mr Raj Rajaratnam to pay over $92 million as penalty in the insider trading case filed against him by the US financial regulator, saying the “huge and brazen nature” of his fraud “cries out” for such an unprecedented fine.
Mr Judge Jed Rakoff of the US District Court for the Southern District of New York entered his final judgment yesterday finding Mr Rajaratnam liable for a civil monetary penalty of $92,805,705, the largest penalty ever assessed against an individual in an insider trading case of the Securities and Exchange Commission.
In the criminal case against Mr Rajaratnam, the Sri Lankan hedge fund founder was ordered to pay more than $53.8 million in forfeiture of illicit gains and $10 million in criminal fines.
The total amount of monetary sanctions imposed on Mr Rajaratnam in the civil and criminal cases now stands at more than $156.6 million.
In imposing the fine, Mr Rakoff said such a severe civil penalty will bring home the message that insider trading should be “a money-losing proposition” for anyone who plans to engage in it.
He said the penalty is further justified given Mr Rajaratnam’s networth which “considerably exceeds” the penalties in the criminal case.
“When to this is added the huge and brazen nature of Mr Rajaratnam’s insider trading scheme, which, even by his own estimate, netted tens of millions of dollars and continued for years, this case cries out for the kind of civil penalty that will deprive this defendant of a material part of his fortune,” Mr Rakoff said in his judgment.