sentenced in what may be the largest hedge fund insider trading case in history.
The 39-year-old is among 21 people arrested and one of a dozen to plead guilty to securities fraud and conspiracy to commit securities fraud in a case surrounding the hedge fund, Galleon Group, which closed last year.
The central player, Galleon Group founder Raj Rajaratnam, says all trading was done on publicly available information. Rajaratnam is currently free on $100 million bail and awaiting trial.
The former vice president of California technology chipmaker Atheros Communications, Hariri admitted to giving insider information about his company to a friend who used it to make trades that earned more than $50 million.
Hariri’s lawyers said in court papers that his friend was a trusted mentor who used the information without Hariri’s knowledge. They requested less than the recommended federal sentence of two years, saying, “Mr. Hariri did not profit directly from these trades, he has suffered irreparable harm to his reputation, and he will never again work as an executive in a technology firm.”
US District Judge Richard J. Holwell, who announced Hariri’s sentence on Monday noted, “The harm is a harm to the system.” For the risk his behavior posed to a fair marketplace, Hariri was sentenced to 18 months in prison.
Hariri’s family left Tehran in 1980 after Iraq’s invasion with only $1,200. He earned his bachelor’s and master’s degrees in electrical engineering from the University of Connecticut.
Now, he writes in a letter to the court, “I am truly sorry for what I did and I will regret it for the rest of my life.”
