A billionaire hedge fund manager charged in a $25 million insider trading case must remain held under $100 million bail because he is one of the richest men in the world and could easily flee, prosecutors told a judge in a letter Wednesday.
The government urged the magistrate judge not to lower 52-year-old Raj Rajaratnam’s bail after his lawyer argued in a submission last week that it should be reduced to $25 million.
Prosecutors said Rajaratnam has the means to live anywhere in the world and knows he would likely face more than 10 years in prison if he is convicted.
They said Rajaratnam, who has both U.S. and Sri Lankan citizenship, has traveled to more than 20 countries in the last few years, including Kenya, China and Pakistan.
"The defendant’s enormous wealth, coupled with his international ties, substantially heighten the risk that he will flee," prosecutors wrote. They said he owns property in Sri Lanka and has a financial account there holding assets of between $25 million and $35 million.
He’s the 236th richest American and is listed by Forbes magazine as the 559th richest person in the world with between $1.3 billion and $1.8 billion, prosecutors noted.
Rajaratnam was charged with conspiracy last month in U.S. District Court in Manhattan, accused of participating in a scheme to make millions of dollars by using inside information about stocks to trade them at a profit ahead of public announcements.
His lawyer, John Dowd, has said he will be exonerated because he did not make illegal trades.
Dowd said Rajaratnam, a portfolio manager for Galleon Group, is considering ways to "wind down" his 125-employee hedge fund company that has managed as much as $7 billion in assets.
Dowd had argued that it was wrong to hold Rajaratnam on such a high bail when even Bernard Madoff’s bail was set at $10 million.
But the government argued that Madoff’s bail was a much higher percentage of his net worth because all of his assets were frozen. They also noted that Madoff was held under 24-hour detention while Rajaratnam was not required to undergo electronic monitoring.
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