A US federal appeals court yesterday upheld the insider trading conviction of Galleon Group hedge fund founder Raj Rajaratnam, rejecting his argument that wiretap evidence was used improperly to convict him.
The decision by a unanimous three-judge panel of the 2nd US Circuit Court of Appeals in New York was a victory for federal prosecutors, who have used wiretaps to win convictions or guilty pleas for dozens of defendants in a wide-ranging investigation into insider trading that was unveiled in October 2009.
A Manhattan federal jury convicted Rajaratnam of nine counts of securities fraud and five counts of conspiracy in May 2011.
The government said Rajaratnam made as much as $63.8m in illicit profits from 2003 to March 2009 trading on stocks, including ATI Technologies, which was bought by Advanced Micro Devices, eBay, Goldman Sachs, Google and Intel.
Rajaratnam, 56, is serving an 11-year prison term in Massachusetts. His firm once managed $7bn.
City A.M. Reporter