US court denies Rajaratnam’s bid to reconsider conviction

PTI New York | Updated on November 19, 2013

Jailed billionaire hedge fund founder Raj Rajaratnam’s petition seeking reconsideration of his conviction for running one of the biggest insider trading schemes in US history has been rejected by a court here.

The United States Court of Appeals for the Second Circuit had said in a ruling yesterday that the petition by Rajaratnam for panel rehearing or “for rehearing en banc” is denied.

En banc hearing

An en banc hearing would have meant that Rajaratnam’s case is heard before a full federal appeals court, instead by a small panel.

The Sri Lanka-born Galleon Group co-founder is currently serving an 11-year prison term after being convicted in 2011 for running one of the biggest insider trading schemes in US history and making over $63 million in illicit profit from 2003 to 2009.

A Manhattan federal jury had found him guilty on nine counts of securities fraud and five counts of conspiracy.

Rajaratnam has also been ordered to forfeit more than $53.8 million and pay a $10-million fine.

Insider trading charges

In June this year, a three-judge panel in the appeals court had upheld Rajaratnam’s conviction on insider trading charges saying the government’s use of wiretaps was proper.

In his appeal, Rajaratnam had said that his conviction should be overturned since prosecutors had misled a judge who authorised the wiretaps in 2008.

The latest court order rejected Rajaratnam’s request to reconsider the June ruling, or have the entire court reconsider it in an “en banc” review.

Prosecutors have said that Rajaratnam received inside information about companies like Goldman Sachs and Procter and Gamble from his friend and business associate India-born former McKinsey head Rajat Gupta.

Gupta, also charged with insider trading and sentenced to two years in prison, is currently free on bail pending appeal.

Rajaratnam and Gupta are among the most high profile Wall Street executives to be charged by Manhattan’s top federal prosecutor India-born Preet Bharara for insider trading.

Bharara’s office in the Southern District of New York has obtained 75 guilty pleas or convictions out of 83 people charged with insider trading since August 2009.

Published on November 19, 2013

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