According to a major article in the Sunday NY Times Magazine: How much time should Raj Rajaratnam spend in prison? Rajaratnam is the hedge fund founder who was convicted in May of trading on illegal stock tips — tips that produced fantastic results for his Galleon Group. Federal authorities compare him with notorious white-collar crooks like Bernie Madoff and Jeffrey Skilling, and they argue for a long time behind bars. His lawyers, however, say Rajaratnam is a lesser-order felon — “not . . . as culpable as a defendant who affirmatively steals,” as they put it in a pre-sentencing memorandum.
The lawyers raise a problem of culture and law: Is insider trading merely an illicit version of a common American cleverness, trading on gossip from a colleague or friend that helps the trader and hurts no one? Or is it the quintessential Wall Street crime, one that has undermined Americans’ faith in the markets?
Richard J. Holwell, a Manhattan federal judge, will give his answer to that question when he sentences Rajaratnam on Sept. 27. A lengthy sentence would go a long way toward validating not just the federal prosecutors who brought the case but also the Securities and Exchange Commission, which first investigated the hedge fund. Before and since the Rajaratnam trial, the S.E.C. has brought numerous cases, part of a campaign to root out insider trading and, in theory, make markets fairer for the average investor. In recent weeks alone, the S.E.C. filed complaints against traders who ran the gamut from celebrity to ordinary….
Read all about it at http://www.nytimes.com/2011/09/25/magazine/in-the-insider-trading-war-market-beaters-beware.html?_r=2&ref=business&pagewanted=all
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