What’s Wrong With This Picture?
Businessman — a billionaire — is found guilty of 14 counts of conspiracy and securities fraud. Prosecutors claim he “made” $64 million in profits pocketed and losses prevented, over a seven-year period. Prison sentence: 15.5-19.5 years. 2011.
Businessman — a billionaire — is found guilty of 98 counts of racketeering and securities fraud. Prosecutors claim he made $1 billion ($1.81 billion in 2011 terms) in profits over four years. Prison sentence: 2 years. 1989.
Businessman — a millionaire — is found guilty of insider trading. He admitted he made $80 million ($164 million in 2011 terms) in profits. Prison sentence: 3.5 years. 1986.
We won’t even touch on the millions — billions? — that legally (one assumes, no cases have been brought by the DOJ) but unethically changed hands that resulted in the collapse of the world’s banking system. 2008-2009.
You can also break them into the two groups (single digit v double digit sentences) based on the color of their skin.
How much did it cost the government to prosecute someone who made $64 million? I’m not saying $64 million is insignificant, but in the scheme of these three men, it’s pretty damn slight.
I’ve not read enough details of the case to have an opinion on the guilt of innocence of Raj Rajaratnam. But on the surface, assuming he is guilty, the punishment appears to be an incredible miscarriage of justice, if Milken (or even Boesky) is the benchmark.
Here are some headlines/stories that might make you think differently about the prosecution and the jury verdict:
- Are clients wrong to give consultants inside knowledge? – The Financial Times
- Is insider trading really a crime? – The Christian Science Monitor
- Why insider trading should be legal – MarketWatch
Copyright 2011 The Moderate Voice