Raj Rajaratnam sentenced to 11 years in prison
Galleon Group founder Raj Rajaratnam exits Manhattan Federal Court after a sentencing hearing on Oct. 13, 2011 in New York City. Rajaratnam was sentenced to eleven years in prison in a hedge fund insider trading scandal.
Kai Ryssdal: Raj Rajaratnam's going to jail. He'll spend 11 years behind bars for his role in one of the biggest insider trading cases there's ever been.
Rajaratnam used to run a hedge fund called Galleon. We wondered this morning, as we thought about how to cover this story, what people were saying about it. People specifically in the world of finance, and down at Zucotti Park at Occupy Wall Street.
Here's the tape -- I'll let you figure out who's who.
Alan Brower: I think it's about time they started imposing these tougher sentences, because it's something that destroys the credibility of the stock market and that's very, very damaging to the country.
Robert JacksonL: I hope justice is served. When it comes to jailtime, I mean, if this is a money thing and he's a real greedy guy, and he's just storing money and not thinking about anything else, then I think he's already suffering. And if he has a good heart and he didn't deserve that, then may his sentence feel shorter than it is, and may he come out with a bolder heart and make a difference in the world, you know?
That last guy was Robert Jackson. We found him in Zuccotti Park this morning; he's been there for a week Occupying Wall Street. Before him, securities lawyer Alan Brower; we talked to him in Midtown Manhattan.
Right now, we're going to talk to our New York bureau chief Heidi Moore about the sentence and whether it's going to make any real difference. Hey Heidi.
Heidi Moore: Hey Kai.
Ryssdal: So you heard the tape: I mean, Wall Street wants its reputation back; the Occupy Wall Streeters, you know, 'he's got guilt in his heart.' What does this really mean for anything really?
Moore: The most important part about this case is that Raj Rajaratnam is not actually the biggest insider trader -- he's just the biggest one we've caught. So when the judge was sentencing him, he made a comment about the virus that's infecting our business culture, this virus of dishonesty. And this case is important because what Raj did went deep. He wasn't just some upstart -- he was a person at the top of the food chain. And this kind of behavior may be how he got there. You know, he's not the only one who has done insider trading. In fact, it's rampant on Wall Street. And so people are really worried: Is the game rigged? And this case has become a centerpoint of that concern about Wall Street.
Ryssdal: Do you believe, then, that this will stop anybody from doing the same thing? Does it un-rig the game?
Moore: It doesn't un-rig it, but what it does is make it harder for people to be as bold as they might have been in doing this kind of thing. The thing that put Raj away was wiretaps, and ever since his case came to light, people have been far more careful on Wall Street about what they say on the phone, over email. They make sure that it's just not as obvious that they're flouting the law or challenging it. And so you have that deterring effect, but we just know it's human nature -- insider trading is as old as the markets themselves. So it won't stop, but hopefully, some people might be discouraged.
Ryssdal: Does it let the powers the be -- the establishment, if you will -- say to the Occupy Wall Streeters and people who are dissatisfied with a lot of what's happening, can they now say, 'Look, we're trying! We got Raj'?
Moore: Yeah, absolutely. This is a huge victory for them. It an enormous case; this is one of the most powerful people on Wall Street who got caught doing this. And the fact that he got caught, the fact that he's being put away, is a significant sign that yeah, there are eyes on the Street. You can't just commit crimes and expect to get away with it.
Ryssdal: But by the same token -- scratching the surface, right?
Moore: That's right. I mean, basically we need a whole U.S. Attorney's office times a million to catch all the guys who do this.
Ryssdal: Heidi Moore in New York. Thanks Heidi.
Moore: Thank you, Kai.