Defense lawyers had countered that the sentence the government sought “would ensure Mr. Rajaratnam’s death in prison — a fate ordinarily reserved only for offenders who have caused the most grave, irreversible, and demonstrable harm to others.”
Rajaratnam “suffers from a constellation of serious and degenerative illnesses which require intensive ongoing medical attention and which even under the best of circumstances will almost certainly shorten his life considerably,” they said in a court filing.
In determining the sentence, Holwell cited Rajaratnam’s need for a kidney transplant and his advanced diabetes, the AP reported. The judge also credited Rajaratnam’s charity work, which he called “the defendant’s responsiveness to and care for the less privileged.”
Asked if he wished to speak, Rajaratnam said only, “No, thank you, your honor,” according to AP.
The insider trading case was the most prominent of its kind since Ivan Boesky was convicted a generation ago.
Rajaratnam will join a list of high-profile white-collar financial figures sent to prison, including former Enron executive Jeffrey Skilling, former WorldCom executive Bernard Ebbers and Ponzi scheme mastermind Madoff
The federal system offers no possibility of parole and only limited credit for good behavior, so it is likely that Rajaratnam will be locked up for at least nine years, said Douglas A. Berman, a law professor at Ohio State University who specializes in criminal sentencing.
Berman said he was surprised that Rajaratnam’s sentence “was as low as it was.” As a deterrent, “there’s reasons to worry this isn’t going to move the needle much,” Berman said.
Sentences for insider trading tend to be significantly lighter than the punishments meted out in major accounting frauds, said Michael Perino, a professor at the St. John’s University School of Law. That might be because the economic impact of insider trading is more diffuse and impersonal than the fallout from accounting frauds such as Enron’s, in which employees lost jobs and particular investors lost huge sums of money, Perino said.
WorldCom’s Ebbers was sentenced to 25 years. Enron’s Skilling was originally sentenced to 24 years but is awaiting resentencing based on an appeal.