Feeds

SEC slaps inside trader with record $93m fine

Bent tycoon traded dirty on IBM, Intel

Intelligent flash storage arrays

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
Knock Knock tool makes a joke of Mac AV
Yes, we know Macs 'don't get viruses', but when they do this code'll spot 'em
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Why weasel words might not work for Whisper
CEO suspends editor but privacy questions remain
DEATH by PowerPoint: Microsoft warns of 0-day attack hidden in slides
Might put out patch in update, might chuck it out sooner
BlackEnergy crimeware coursing through US control systems
US CERT says three flavours of control kit are under attack
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
Simplify SSL certificate management across the enterprise
Simple steps to take control of SSL across the enterprise, and recommendations for a management platform for full visibility and single-point of control for these Certificates.