Raj Rajaratnam, the Galleon hedge fund founder convicted of insider trading on stocks including AMD, IBM, Intel and 3Com, is embroiled in a legal fight over how much profit he made.
Rajaratnam, 55, appeared in a US court this week, as his lawyers argued he made $7.4 million from the trades, instead of the $70 million claimed by the government.
His conviction of insider trading dates back to May, and came after the jury had heard taped phone calls between him and a range of alleged informants who were aware of the non-public strategies of companies he later traded in. He is under house arrest.
The amount he gained is important because it will vastly affect his sentence. The figure given by the prosecution could lead to a more than 20 year jail sentence, which Rajaratnam’s lawyers have already described as being effectively a “death sentence” for the trader.
Rajaratnam’s lawyers contend that their much-lower calculation of profits is correct, and would lead to a jail sentence of six to eight years. They say that prosecutors have included many of his trades were made after the time when information was public, and were therefore legitimate.