Sri Lankan American Raj Rajaratnam, the man who was central to what some consider the largest hedge fund insider-trading rings in the history of the U.S., was released from prison two years early.
Bloomberg reported Sept. 5 that the release happened more than six weeks prior, allowing Rajaratnam to be free, but mostly confined to his apartment for the remainder of his sentence.
He is, however, free to work outside his home during the day, the report said.
Rajaratnam, whose Galleon Group LLC once managed more than $7 billion, has been living with his family on a quiet block of Manhattan’s East Side since July 23, according to the Federal Bureau of Prisons.
Sentenced to 11 years behind bars after his 2011 conviction, he served his time at the Federal Medical Center Devens, a prison outside Boston.
Rajaratnam, 62, is a beneficiary of the 2018 First Step Act, which allows some federal inmates who are over 60 years old, or who face terminal illnesses, to serve the end of their sentences at home, the report said.
Arrested in an early-morning FBI raid in October 2009, he was in the first wave of defendants charged by federal prosecutors in New York, with dozens of other traders, executives and company insiders accused in the years that followed.
The move from prison wasn’t announced by the U.S. Bureau of Prisons or by Rajaratnam’s legal team, and only became apparent after his location on the bureau’s public website was changed from Devens to “New York RRM,” an administrative unit that oversees inmates in halfway houses and on home detention, according to the report.
Rajaratnam was due to be released on July 4, 2021, according to the BOP website. More than 240 applications for home confinement for “elderly offenders” have been granted under the First Step Act, according to the bureau. Rajaratnam isn’t required to wear an electronic-monitoring device to keep tabs on his location, according to a person familiar with the arrangement who asked not to be named. It’s unclear if Rajaratnam is now employed, the Bloomberg report said.
After 12 days of deliberations, a jury in New York found Rajaratnam guilty of 14 counts stemming from a seven-year plot to trade on inside information from corporate executives, bankers, consultants, traders and other insiders. Among his tipsters was Indian American Rajat Gupta, then a board member at Goldman Sachs Group Inc., who later went to prison for leaking secrets to Rajaratnam. Prosecutors said Rajaratnam earned more than $72 million from the illicit tips. Rajaratnam’s 11-year sentence was one of the longest in the insider crackdown.