According to CNBC Editor Jonn Carney the idea that the sentence handed down Thursday to fallen-hedge fund billionaire Raj Rajaratnam resembles anything like the proper administration of justice depends on a very common factual error. The error: Investors are victimized by insider traders.
Rajaratnam received the longest prison sentence ever for insider trading . But unlike those convicted of any other kind of fraud, Rajaratnam’s sentence is not at all linked to the harm he inflicted on his victims.
The reason why Rajaratnam’s sentence isn’t linked to any victims is because no one has found any victims. They just don’t exist. Even the judge in the case couldn’t identify a victim. Instead, he called insider trading an “assault on the free market.”
Many people think investors on the other side of Rajaratnam’s trades are harmed, people who sold stock when Rajaratnam was buying but lacked the informational advantage he had illicitly obtained.
But are they really harmed?
Find out more at http://www.cnbc.com/id/44894853
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