Thursday, October 13, 2011

Sentencing due in US insider-trading case Hedge-fund founder Raj Rajaratnam may get long prison sentence if federal judge grants the government's request.

Prosecutors are seeking a 20-year prison term for Rajaratnam's conviction on security fraud charges [AFP]
A hedge-fund founder once recognised as one of the richest citizens in the US would serve the longest sentence in history for an insider trading conviction if a federal judge grants the government's request to send him to prison for two decades.
Raj Rajaratnam's sentencing was scheduled for Thursday in Manhattan.
Prosecutors are asking US District Judge Richard Holwell to send the 54-year-old former billionaire to prison for at least 19 and a half years for his May conviction on securities fraud charges. They say federal sentencing guidelines call for a sentence up to 24 and a half years.
The prosecution has placed Rajaratnam's profits from illegal trades between $70m and $75m, saying he moved so much money around within his multibillion dollar funds that the movement of price in individual
stocks could be traced to his trading whims.
The sentencing comes as the nearly month-old Occupy Wall Street protests march on, sending daily messages opposing Wall Street greed and corporate excess.
Danny Schechter, a filmmaker who handed out leaflets at the protests on Wednesday calling Wall Street a "crime scene", said the prosecution and sentencing of Rajaratnam might miss the point.
He said prosecutors too often seem determined to protect investors rather than shield the public at large and consumers from corporate greed.
He said the larger crime was collusion by corporations, which should be prosecuted as well. "The government is not doing that," he said.
Leniency sought
Lawyers for Rajaratnam, a Sri Lanka native, argue that his sentence should be much lower - six and a half to nine years - for what they say was illegal profits of about $7m, when the trades at his Galleon Group of hedge funds are disregarded.
The defence also has asked for leniency partly based on Rajaratnam's "failing health" and his "unique constellation of ailments." They say a lengthy prison term will amount to a death sentence.
The sentencing culminates a series of convictions and sentencings that followed the October 2008 announcement of the arrest of Rajaratnam in what prosecutors labelled the biggest hedge fund insider trading case in US history.
In all, more than two dozen people were arrested. All were convicted with the sentences ranging from a few months to 10 years. Since the first arrests, Preet Bharara, the US attorney, has widened the probe. A year ago, he said insider trading is "rampant and may even be on the rise".
Using information gleaned from the many cooperators in the Rajaratnam case, prosecutors have focused lately on consultants who are paid to arrange conversations between employees of public companies and hedge fund managers.
Too often, prosecutors say, they have found a nest for insider trading rather than for the discussion of legitimate research.In their pre-sentence submissions, prosecutors say Rajaratnam lacks remorse, even after a trial that featured the playing of dozens of taped conversations in which Rajaratnam was heard discussing financial news events that were not yet publicly known.
"Rajaratnam has neither acknowledged responsibility for his crimes nor remained silent. Instead, Rajaratnam's post-conviction statements show that he remains defiant that he never committed insider trading and, incredibly, he maintains that the line between legal and illegal conduct was not always clear to him,'' prosecutors wrote.
They quoted from a report that is not public that he told the probation department: "In my own mind, the line between permissible 'detective work' and impermissible insider trading was not always clear, especially with
regard to companies broadly covered by the news media as to which there was a wealth of publicly available information, including frequent leaks, rumours and speculation about corporate transactions and other  important developments."
Lacking respect
The prosecutors wrote that Rajaratnam's comments "do not reflect the proper respect for the jury's verdict, the evidence in the trial record or the laws against insider trading."
Prosecutors also have asked the judge to force Rajaratnam to reveal his medical issues since he is relying on them in his plea for leniency.
The judge has not yet ruled on the request. And, in a filing Wednesday, they asked the judge to revoke Rajaratnam's $100m bail and force him to report to prison within three weeks. He currently is confined to his Manhattan apartment.
In their written submissions, defence lawyers said Rajaratnam should receive leniency with a sentence substantially below the guidelines range because of his failing health and his extensive community service.
"Such a sentence would by no means return Mr Rajaratnam to the life he enjoyed before his arrest, nor would it exempt Mr Rajaratnam from a meaningful loss of liberty. It would simply save him from a loss of life,''
the lawyers wrote.

Strauss-Kahn French rape case dismissed Officials say evidence suggested sexual assault against writer in 2003 by ex-IMF chief but it is too late to prosecute.

Srauss-Kahn had denied Tristane Banon's claim that he attempted to rape her during a book interview in 2003 [AFP]
The Paris prosecutor's office has dropped an investigation into a French writer's claim that Dominique Strauss-Kahn, the former head of the International Monetary Fund (IMF), tried to rape her for lack of sufficient evidence.
The office said on Thursday that Strauss-Kahn admitted to sexual aggression against Tristane Banon and that evidence existed suggesting that a sexual assault had taken place, but that it was too late to prosecute.
In France, charges of sexual assault carry a shorter statute of limitations than attempted rape.
Banon alleges that Strauss-Kahn tried to rape her in 2003 during an interview for a book. Strauss-Kahn has denied the claim.
Strauss-Kahn quit his job as head of the IMF after a New York hotel maid accused him of attempted rape earlier this year. Prosecutors later dropped that case.

Aid workers abducted from Kenyan refugee camp Kenyan police say al-Shabab fighters have kidnapped two Spanish aid workers belonging to MSF from Dadaab refugee camp.

Members of the Somalian rebel group al-Shabab have abducted two female Spanish aid workers from Kenya's Dadaab refugee camp, a regional police official has said.

"Two aid workers of Spainish nationality have been kidnapped by the Shabab, they are working for MSF (Medecins Sans Frontieres)," Leo Nyongesa, regional police chief, told the AFP news agency on Thursday.
The district commissioner of Dadaab told Al Jazeera that MSF staff usually travel without security escorts. He said military helicpoters had begun a search for the aid workers.

Al Jazeera's Nazanine Moshiri, reporting from Nairobi, said the aid workers' Kenyan driver was shot in the neck, but was in a stable condition.
"The border area has been closed, and they are searching for the women using military helicopters. The problem is, this kidnapping happened quite a while ago and there are smuggler routes which the Somali do use and these two women could be in Somalia by now," she said.
"They Kenyan police believe that al-Shabab, the Islamist group, is responsible."
Safety at camp
Currently the world's largest refugee camp, Dadaab hosts at least 380,000 Somalis fleeing the severe drought that killed livestock and destroyed crops.
The recent kdinapping, along with the abduction three weeks ago of a Kenyan driver working for Care Kenya has raised questions about the safety of aid workers.
Analysts believe the recent escalation of kidnappings could represent a new tactic by al-Shabab fighters who have experienced heavy blows in the recent offensive by African Union troops and soldiers from Somalia's Transitional Federal Government.
In recent weeks, a French woman and a British tourist were also kidnapped in separate incidents near the border with Somalia.
Gunmen took the French woman from her home near the resort town of Lamu on October 1. Kenyan authorities gave chase but said the kidnappers escaped into Somalia. The government blamed al-Sbabab.
In early September, attackers believed to have been Somali pirates shot dead a British man and kidnapped his wife from a resort north of Lamu.
Pirates have long sought ransoms in the millions of dollars for high-value hostages typically taken at sea.

Italian PM stakes survival on confidence vote Berlusconi addresses parliament in advance of possible trust vote amid concerns over his political future.

Berlusconi  is bracing for a confidence vote in parliament that will determine his political future [EPA]
Silvio Berlusconi has asked parliament for a confidence vote that will allow him to continue governing at the helm of a centre-right coalition.

The Italian prime minister addressed the lower house of parliament on Thursday, after his government's defeat by one vote on a routine but still crucial bill on Tuesday, when a score of his deputies failed to attend.

"There is no alternative to this government," the 75-year-old leader said in a speech that was applauded by his centre-right allies but boycotted by legislators from the centre-left in a rare sign of defiance.
"What is the probability that Berlusconi will fall tomorrow with a clear-cut vote? Very low. In practice, zero"
- Stefano Folli, columnist
"We want to continue working for the good of families and businesses even though a campaign of unprecedented violence has been launched against us by an opposition that is united only by its anti-Berlusconism," he said.

"I am here and with me I have a politically cohesive majority, apart from some incidents in parliament," he added, referring to the coalition's defeat on Tuesday. It was that embarrassing loss that led Berlusconi to address parliament.

"Our task and our duty is to defend Italy from the economic crisis," he added.
Berlusconi has staked his government's survival on a vote of confidence in parliament that could take place on Friday.

"Early elections would not solve the problems we have. A crisis now would mean victory for the party of decline, catastrophe and speculation that has been active for months in Europe and Italy."

'Landmark fail'
His speech came as a few anti-capitalist protesters were camped out in front of the Bank of Italy after a 2,000-strong rally on Wednesday, inspired by the "Indignant" movement in Spain and "Occupy Wall Street" in the US.

Their protest is expected to build up to a bigger rally on Saturday.
Berlusconi's popularity is at an all-time low.

He is a defendant in three trials for bribery, tax fraud, abuse of power and paying for sex with a 17-year-old girl - as well as the subject of an array of other sex scandals.

Political uncertainty in Italy and its effect on long-term economic policymaking was cited as a key factor for the recent downgrades of its sovereign debt by ratings agencies Standard & Poor's, Fitch and Moody's.

Al Jazeera's Claudio Lavanga has the latest on
the political storm surrounding Berlusconi
Many commentators saw Tuesday's vote defeat as a landmark in the decline of the Berlusconi's political career - which began in the early 1990s when he entered politics with a party called Forza Italia (Go Italy).

The failure to pass the document on the 2010 state balance sheet has created an unprecedented problem for the government.
It cannot approve the country's upcoming budget until the accounts for the previous year have been ratified.

Former Berlusconi allies such as Claudio Scajola, the ex-economic development minister, have voiced their discontent and rumours have swirled for months over where exactly the allegiances of Giulio Tremonti, the finance minister, lie.

Some commentators have said the chances of a general election before the end of the government's mandate in 2013 are now higher than before.

Others, however, argue that it is too early to dismiss Berlusconi.

"What is the probability that Berlusconi will fall tomorrow with a clear-cut vote? Very low. In practice, zero," Stefano Folli, a columnist for business daily Il Sole 24 Ore, said.

"And yet few people think that winning the confidence vote will guarantee him smooth sailing," he said.

"The prime minister's real problems are the ones that existed before his visit to parliament and will continue to exist after it."