Rajaratnam to pay $1.45M to settle SEC case
The hedge fund founder serving the longest prison term ever given for insider trading also will be writing the government another big check.
Raj Rajaratnam, a one-time billionaire convicted last year of trading on inside information, will pay nearly $1.45 million to settle a civil case brought by the Securities and Exchange Commission, court documents in Manhattan show.
A federal judge Thursday approved the deal, which requires Rajaratnam to pay the settlement within 90 days and waive any right to appeal it.
The documents say the settlement includes $1.29 million representing "profits gained and losses avoided" as a result of trading on tips from a former Goldman Sachs Group Inc. director convicted separately in June. The settlement also includes $148,000 in prejudgment interest.
In the criminal case against him, he was fined $10 million and was ordered to forfeit $53.8 million in what U.S. District Court Judge Jed Rakoff said last year were illicit profits from trading on confidential corporate information.
Prosecutors said Rajaratnam earned as much as $75 million in illegal profits in a case that resulted in more than two dozen convictions. They said he acted on secrets he got from friends and colleagues in the securities industry and at public companies.
Rajaratnam, 55, is serving 11 years at a Massachusetts federal prison and has appealed.