NEW YORK — A former top executive at a $1 billion hedge fund investment firm was sentenced to more than two years in prison Friday in the first sentencing to result from what prosecutors have called the largest hedge fund insider-trading case in history.
Mark Kurland, 61, of Mount Kisco, N.Y., was sentenced Friday to two years and three months in prison and ordered to forfeit the $900,000 he made through illegal trades by a judge who blamed the attitudes of people like Kurland for the country’s financial collapse two years ago.
U.S. District Judge Victor Marrero said Kurland, a co-founder of New Castle Partners hedge fund in Manhattan, “frankly should have known better” than to join an insider-trading scheme that led to the arrests of top executives including one-time billionaire Raj Rajaratnam.
“He had a choice as a leader of the financial industry. He could have led by example. Instead, he chose to follow. He became a joiner, surrendering to a spree of mob mentality that nearly brought down this country’s financial industry,” Marrero said.
Kurland, who had pleaded guilty to conspiracy to commit securities fraud and securities fraud, was among 11 people who have pleaded guilty in the case.
Rajaratnam, the portfolio manager for the Galleon Group hedge fund, has pleaded not guilty and disputed claims that he pocketed as much as $50 million through a network of cheating executives at financial firms and companies privy to inside information.
Before he was sentenced, Kurland said his crime had “destroyed my reputation and everything I have worked hard for my entire life.” He said he was “heartbroken and profoundly ashamed” and conceded that he should have known better.
