A FEDERAL judge has ordered Raj Rajaratnam, the Galleon Group hedge fund founder sentenced to 11 years in prison for insider trading, to pay a record $92.8m (£57.7m) penalty in a related Securities and Exchange Commission civil case.
The penalty imposed by US District Judge Jed Rakoff in Manhattan is in addition to the $63.8m that Rajaratnam’s lawyers said their client has already paid in his criminal case, including $53.8m that was forfeited and a $10m fine.
Rajaratnam was convicted of 14 counts of securities fraud and conspiracy in the criminal case in May. He was given an 11-year prison term, the longest recorded US sentence for insider trading, and is due to begin his sentence on 5 December.
The SEC said Rajaratnam’s civil penalty is the largest against an individual in an insider trading case brought by the regulator.
Rakoff said a severe civil penalty for Rajaratnam was needed to make clear that insider trading should be “a money-losing proposition” for all who consider it.
The net worth of Rajaratnam, a former billionaire, “considerably exceeds” the penalties in the criminal case, the judge added.