Nov. 5 (Bloomberg) -- Raj Rajaratnam, the Galleon Group hedge fund founder accused of directing an elaborate insider- trading ring, lost a bid to cut his $100 million bail.

U.S. Magistrate Judge Theodore Katz in Manhattan today refused to reduce Rajaratnam’s bail to $25 million, as his lawyers requested. Prosecutors opposed the request, saying Rajaratnam may flee the country to escape the charges against him. Katz did allow Rajaratnam to travel across the U.S. as long as he alerts prosecutors. Previously he could go no farther than Philadelphia.

“I don’t really see a reason to revisit the monetary amount,” Katz said in court.

Rajaratnam was arrested on Oct. 16 and accused with five others of making millions of dollars by trading on inside information. All have denied wrongdoing. Federal prosecutors in New York today announced charges against another 14 people, bringing to 20 the number of people charged in the largest-ever alleged hedge-fund insider trading case.

Rajaratnam, who was released from custody the night of his arrest, was present in court for today’s argument. He didn’t speak.

Recorded Conversations

Prosecutors today told Katz they have a strong case against Rajaratnam, 52, which is based on recorded conversations he made and on the testimony of several witnesses including former Intel Corp. executive Roomy Khan. Assistant U.S. Attorney Josh Klein also offered new details about the government’s investigation.

He said an audit of Galleon by the Securities and Exchange Commission uncovered a message to Rajaratnam from an accomplice telling him to “hold off” on Polycom Inc., a reference to trading securities of the California maker of videoconferencing systems, until the accomplice gets additional “guidance.”

Defense attorney John Dowd told Katz that Rajaratnam has extensive ties to the U.S. and won’t flee, that he needs to travel to meet with his lawyers in Washington, and that the government’s case is weak. He said prosecutors didn’t seize trading records from Galleon and begin presenting them to a grand jury until after Rajaratnam’s arrest.

“The complaint is not as overwhelming as it seems,” Dowd said.

Dowd said that Rajaratnam needs $2.5 million that he put up as part of his bail to pay Galleon’s liabilities, and that he is also bringing assets he has in his native Sri Lanka back to the U.S.

The criminal case is U.S. v. Rajaratnam, 1:09-mj-02306, and the SEC case is SEC v. Galleon Management LP, 09-cv-08811, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net, and Bob Van Voris in New York at rvanvoris@bloomberg.net.

Last Updated: November 5, 2009 15:43 EST