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The Galleon insider trading conviction is not a Wall Street crisis conviction



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As I've said many times before, if Rajaratnam is guilty, fine, find him guilty and send him to prison. But let's not confuse this case with the much larger problem of Wall Street triggering the recession. Rajaratnam was a swindler and used insider information to profit by tens of millions of dollars. That's a much different story than the trillions of dollars needlessly lost by Wall Street, yet we see no legal action related to those losses. Reuters:

Raj Rajaratnam, a self-made hedge fund tycoon convicted in the biggest Wall Street trading scandal in a generation, was ordered on Thursday to serve 11 years in prison, one of the longest sentences ever in an insider-trading case but far less than prosecutors sought.

The sentencing caps a prosecution, marked by secret wiretaps of Rajaratnam and his associates, that shocked the investment world. Rajaratnam once ran a $7 billion hedge fund, but was found guilty of running a network of informants who provided him with corporate secrets.

The sentence was lighter than the 19-1/2 year minimum prison term that prosecutors had sought, but is still above the 10 years handed down recently in another major insider trading case.


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