Feeds

SEC slaps inside trader with record $93m fine

Bent tycoon traded dirty on IBM, Intel

Remote control for virtualized desktops

Insider trading does not pay, a judge in an American civil court declared, putting a record fine on Raj Rajaratnam, the businessman who was found guilty of insider trades using a network of tech insiders – including executives at IBM and Intel.

The $92.8m fine handed down by Judge Jed Rakoff is in addition to an 11-year jail sentence Rajaratnam already faces from his federal case. The former fund manager's dodgy deals through hedge fund Galleon included trades on Intel and IBM. The reward will be collected by the Securities and Exchange Commission (SEC), which brought the case against the billionaire in October 2009.

“This case cries out for the kind of civil penalty that will deprive this defendant of a material part of his fortune,” Rakoff wrote in the order, according to the FT. He added that SEC civil penalties were necessary to send a message that insider trading was a “money-losing proposition”.

The SEC noted that the judgment marked "a record financial penalty". Robert Khuzami, director of the SEC’s Division of Enforcement, reflected that, “The penalty imposed today reflects the historic proportions of Raj Rajaratnam’s illegal conduct and its impact on the integrity of our markets.”

The Rajaratnam case has led to 29 individuals being charged, including former McKinsey & Co worldwide head Rajat K Gupta and Robert Moffat, and involves the assets of several Silicon Valley companies as well as Wall Street dealers.

Adding up the amount Rajaratnam has already paid out for in compensation, his total bill comes to $156.6m – including charges of $53.8m in forfeiture of illicit gains and $10m in criminal fines. The Sri Lankan also faces 11 years in the nick – the longest prison term ever given for insider trading. ®

Internet Security Threat Report 2014

More from The Register

next story
Webcam hacker pervs in MASS HOME INVASION
You thought you were all alone? Nope – change your password, says ICO
You really need to do some tech support for Aunty Agnes
Free anti-virus software, expires, stops updating and p0wns the world
Meet OneRNG: a fully-open entropy generator for a paranoid age
Kiwis to seek random investors for crowd-funded randomiser
USB coding anarchy: Consider all sticks licked
Thumb drive design ruled by almighty buck
Attack reveals 81 percent of Tor users but admins call for calm
Cisco Netflow a handy tool for cheapskate attackers
Privacy bods offer GOV SPY VICTIMS a FREE SPYWARE SNIFFER
Looks for gov malware that evades most antivirus
Patch NOW! Microsoft slings emergency bug fix at Windows admins
Vulnerability promotes lusers to domain overlords ... oops
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Reducing the cost and complexity of web vulnerability management
How using vulnerability assessments to identify exploitable weaknesses and take corrective action can reduce the risk of hackers finding your site and attacking it.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.