BY NOE GANDILLOT
ANCHOR ANA COMPAIN-ROMERO

It’s the longest prison term for insider trading in U.S. history. Hedge fund billionaire Raj Rajaratnam has been sentenced to 11 years behind bars. CNBC reports:

“Galleon hedge fund founder Raj Rajaratnam sentenced to eleven year in federal prison in connection with insider trading, his conviction last may also find 10 million dollars. This is a record insider trading sentence.”

The trader allegedly made profits or avoid losses of $72 million by using a corrupt network of tipsters - among them former executives of McKinsey & Company, Intel or I.B.M. Prosecutors called Mr. Rajaratnam “the modern face of illegal insider trading.”

Although an all-time high, the 11-year sentence is considerably less than the 24 years prosecutors had sought. MSNBC reports, the judges took the 54 year-old man’s poor health condition into account.

"Raj Rajaratman has advanced diabetes. He’s in imminent need of a kidney transplant and as a result, the judge said it is unclear whether the fed prison system will been able to care for him adequately, and that was one of the thing that weighed against a heavier sentence.”

Rajaratnam’s defense team is appealing. Nevertheless, The Economist says the judge’s historic sentence is meant to send a clear message to capital markets.

“Mr Rajaratnam’s demise is a boon for regulators’ campaign to root out market abuse and prove the markets are welcoming of ordinary investors. At one point Galleon was one of the largest hedge funds in the world. But now it is an example of Wall Street’s misguided hubris and greed. Mr Rajaratnam’s crimes, the judge said, ‘reflect the virus in our business culture that needs to be eradicated.’”

The Economist also notes Mr Rajaratnam’s sentencing highlights a “central issue for insider trading: how you calculate the victims.” So, is Rajaratnam’s sentence too long, too short or just about right?

In an interview with Bloomberg, formal federal prosecutor Douglas Burns says there is no easy answer to that question.

“You could have academic seminars all-day long about : ‘should somebody who robs a bank with a gun, how should He be punished versus a guy who steals with a business suit and a calculator to buy an 18-million dollar yacht ?’ (...) There are different theories and ideologies about that.”

And American society’s tolerance of offenses like insider trading have changed over the years. As The New York Times notes, Mr. Rajaratnam’s sentence continues a trend of ever-stiffer penalties against white-collar criminals.

“Historically, judges showed leniency when penalizing corporate criminals because they were not seen as a threat to society... But gone, for the most part, are the days of slap-on-the-wrist sentences and ‘country club’ prisons where white-collar defendants would serve short stints in relatively comfortable quarters.”

And Raj Rajaratnam might soon share his cell with another notorious white-collar convict.

The insider trader’s defense team asked that he serve his prison term at the Butner Federal Correction Complex, whose most famous inmate right now -- is Bernie Madoff.