Four months after being convicted for insider trading, Galleon founder Raj Rajaratnam received on Thursday a sentence of 11 years in prison.  That's the longest ever for insider trading, but it was not what most people expected.  Federal prosecutors sought 19-1/2 to 24 years for the man they called "the modern face of illegal insider trading."

[See links to various accounts of Thursday's sentencing, below.]

With this historic prison sentence, Judge Richard Holwell continued the current judicial trend of issuing ever-stiffer penalties against white-collar criminals.  Legal experts attribute the longer prison terms, in part, to 1987, when federal sentencing guidelines were introduced - to link the length of a sentence to the dollar amount of the fraud.  Prosecutors accused Rajaratnam of generating $64mn in illicit gains. Legal experts say that because prison terms across all federal crimes have substantially increased over the past two decades, it stands to reason that the length of sentences for executives on Wall Street and in corporate American would also grow. Different Sentencing Strategies Result in Similar Sentences. A defiant Rajaratnam told the court that he did not deserve a long prison sentence because he had not hurt other investors by his actions.  He and his attorneys also pointed out that he was in poor health - and, in fact, will require kidney surgery.  By comparison, an apologetic and contrite Zvi Goffer, the former trader at Galleon, got 10 years in prison, even after expressing his sincere regrets for doing the wrong thing. Advocates of more lenient insider-trading sentences say that the insider trading crime does not have any real identifiable victims, whereas other white-collar crimes such as Ponzi schemes or corporate accounting frauds destroy lives and livelihoods. Those in favor of harsh sentences, like United States attorney Preet Bharara, want to create a deterrent effect so as to “convince rational business people that the risk is not worth it.”  Another potential deterrent is the unprecedented investigatory tactics and vast resources deployed by federal authorities in their pursuit of Mr. Rajaratnam and his co-conspirators.

For various accounts of Thursday's sentencing, go to:    [Dealbook, 10/13/11]    [CNBC.com]    [WSJournal]    [Bloomberg]   [Reuters]   [Yahoo]