Federal Judge Richard Holwell is expected to sentence Raj Rajaratnam on September 27.  On Tuesday, he heard arguments from prosecutors and defense attorneys.  Rajaratnam was found guilty on 5 counts of conspiracy and 9 counts of securities fraud in May.  Here's what they told the judge. 

Lawyers for Rajaratnam:  It's tantamount to a "death sentence," lawyers for Galleon hedge fund founder Raj Rajaratnam told the judge, when describing a long prison sentence. And, it would be unfair and overstate the seriousness of the offense.  "Mr. Rajaratnam's failing health and the unique constellation of ailments ravaging his body mean, quite simply, that a lengthy period of imprisonment will constitute a death sentence and result in the permanent and final separation of Mr. Rajaratnam from his family."

Defense lawyers further had this to say in the memo to the judge:

• Rajaratnam is a philanthropist who had donated more than $45mn of his personal wealth to charitable causes.
• Rajaratnam's friends, family, colleagues and others sent in letters describing him as "a man remarkable for his kindness, quiet mbusiness anner, lack of pretense, and boundless generosity."
• A childhood friend from Sri Lanka, where Rajaratnam was born, told how a younger Rajaratnam would help families with household chores in exchange for a monetary contribution to charities he was involved with. 
• The evidence submitted to the court "bears scant resemblance to the greedy criminal kingpin the government attempts to portray."

Federal Prosecutors:  Rajaratnam is "arguably the most egregious violator" of insider trading laws ever, and deserves 19-1/2 to 24-1/2 years in prison.  "Raj Rajaratnam's criminal conduct was brazen, arrogant, harmful, and pervasive.  He corrupted subordinates.  He corrupted entire markets. Day after day, month after month, year after year, Rajaratnam operated as a billion-dollar force of deception and corruption on Wall Street."

Prosecutors accused him of trading on inside information, which resulted in $63.8mn of illegal profit:

• The requested sentence is in accordance with the federal guidelines.
• A severe sentence is needed to reflect the seriousness of Rajaratnam's criminal activity.
• A severe sentence is intended to "deter others - particularly in the hedge fund and money management world from engaging a crime that is far too rampant."

The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.

[Reuters, 8/1011]