Rajaratnam Rejected by High Court on Trading ConvictionGreg Stohr
Galleon Group LLC co-founder Raj Rajaratnam lost a U.S. Supreme Court bid to overturn his conviction and 11-year prison sentence for masterminding one of the biggest insider-trading schemes in a generation.
The nation’s highest court without comment today rejected Rajaratnam’s appeal, which contended that prosecutors should have been required to prove that inside information played a substantial role in his trades. The Justice Department argued that it provided overwhelming evidence on that issue.
Rajaratnam, 57, also said prosecutors misled a judge to get approval for wiretaps of his telephone calls. Jurors listened to more than 45 recordings, some of which involved Rajaratnam gathering nonpublic information from his sources.
A federal jury in Manhattan convicted Rajaratnam on nine counts of securities fraud and five counts of conspiracy in 2011. He is serving his sentence at the Federal Medical Center Devens in Ayer, Massachusetts. A judge also ordered Rajaratnam to forfeit more than $53 million and pay a $10 million fine.
Rajaratnam oversaw a hedge fund that once was among the 10 largest in the world, managing more than $6 billion at its peak in 2008.
His lead Supreme Court lawyer, Pratik Shah, declined to comment on today’s action.
The rebuff comes days after Justice Ruth Bader Ginsburg rejected a last-ditch bid by one of Rajaratnam’s sources, Rajat Gupta, to avoid having to report to prison. Gupta, a former Goldman Sachs Group Inc. director, was sentenced to two years in prison for passing tips to Rajaratnam.
Since August 2009, prosecutors in the office of Manhattan U.S. Attorney Preet Bharara have charged 86 people with insider trading, including Rajaratnam and his brother, Rengan Rajaratnam.
Of that number, 81 cases have resulted in convictions, mostly through guilty pleas. No one charged with insider trading during that time has been acquitted.
The case is Rajaratnam v. United States, 13-1001.