Raj Rajaratnam was given a sentence of 11 years on Thursday Oct. 13 for securities fraud.
He also must pay a $10 million fine.
This is the longest sentence to ever be handed down to an individual convicted of insider trading, or the illegal exchange of confidential information.
Judge Richard Holwell sentenced the former head of the Galleon Group hedge fund to 11 years after being convicted of nine counts of insider trading and five counts of conspiracy, according to The New York Times.
His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated, Judge Holwell said.
Rajaratnam weaved a strategic web of informants from companies such as I.B.M., Intel, and McKinsey & Company to reap the rewards of $64 million.
Initially, reports said that Rajaratnam could face a quarter-century term of 25 years.
A 24-year sentence would exceed the average federal sentences for sexual abuse, kidnapping and even murder.
Many disagreed with such a severe sentencing.
The disparity between the proposed sentence for Rajaratnam and the sentences his co-conspirators received is excessive, well beyond what the guidelines contemplate when they allow credit for substantial assistance and acceptance of responsibility, says Artur Davis, a partner at SNR Denton, an international law firm.
A fair sentencing regime should not reflect such a dramatic difference in penalty between individuals who committed the same core offenses.
Davis was a former federal prosecutor himself.
He believes that what Rajaratnam did not merit an extremely harsh punishment because his crimes did not imperil the larger economic market or the hedge fund industry.
The New York Times emphasizes how this case is an historic one in terms of even the 11-year sentence.
Rajaratnam is one example of the crackdown on white collar criminals and the tougher consequences they must face.
Other examples of this are Bernie Madoff, Lee B. Farkas, and Adley H. Abdulwahab - all three of which were dealt heavy sentences for their white collar crimes.
These extreme prison terms reflect the unreality of the sentencing guidelines in white collar cases. The loss amount - which can be calculated into millions of dollars of improper gains - drives these sentences beyond what the most violent criminals would get, even when the loss is nowhere near the level of a Bernie Madoff, said Glenn Colton, another partner at SNR Denton.
But gone are the days of sympathy towards those who stand on pedestals.
We're talking about people, in some instances, who are basically creating a business model for a stable of insider sources. That has been distressing, said U.S. attorney in NYC, Preet Bharara.
Rajaratnam is a 54-year-old father of three who co-founded the Galleon Group hedge fund. He received his MBA from Wharton School of Business at the University of Pennsylvania.
The government began its investigation into the firm in 2008, according to The Wall Street Journal. By that time, Rajaratnam was handling billions of dollars in assets. Rajaratnam was arrested by the FBI in 2009.