MANHATTAN (CN) – Billionaire Galleon hedge-fund founder Raj Rajaratnam, who was convicted on 14 counts of masterminding the largest insider-trading scheme of its kind, asked a federal judge Tuesday to refrain from sentencing him to the maximum as requested by prosecutors, a term of 24 ½ years.
Every one of Rajaratnam’s 40-plus co-conspirators also stands convicted, and many also have received lengthy sentences.
The 54-year-old Sri Lankan businessman says that the sentence will aggravate unspecified health conditions, which he shared with the court under a seal that prosecutors are trying to lift.
Rajaratnam’s lawyer Samidh Guha told U.S. District Judge Richard Holwell that more than two decades in prison is “not supported by the record, and more importantly, isn’t fair and just, Your Honor.”
In the first part of the hearing, prosecutors defended their calculations that Rajaratnam reaped approximately $64 million on illicit trades, while the defense hoped to convince the judge that the actual figure was about an eighth that amount – at $8 million.
The defense calculations came from Professor Gregg Jarrell, who admitted on the witness stand that Rajaratnam paid him and his firm nearly $1 million.
Prosecutors added that Rajaratnam should get a sentencing “enhancement” for allegedly lying to the Securities and Exchange Commission about his trades.
Guha chalked his client’s faulty testimony up to memory lapses over more than 17 hours of SEC questioning, and said that answers to 11 questions were at issue.
Assistant U.S. Attorney Reed Brodsky countered that Rajaratnam had months to prepare his answers, and his memory served him well for questions that did not “inculpate” him.
“There has to be a serious price to be paid for lying to the SEC,” Brodsky said.
Defense attorneys also contended that Rajaratnam should not get an obstruction-of-justice enhancement because prosecutors did not criminally charge him for it.
Brodsky quipped that there could have been “hundreds, maybe thousands” of counts on Rajaratnam’s indictment if they listed every one.
Guha balked at that “hyperbole,” which he said did not belong in the “grave exercise of seriousness” in calculating his client’s incarceration.
Rajaratnam will be sentenced on Oct. 13.