* Jury convicted Galleon hedge fund founder in May 2011
* Rajaratnam challenges use of wiretaps by investigators
* Oral arguments in U.S. appeals court in New York
By Grant McCool
NEW YORK, Sept 7 A federal appeals court will
hear oral arguments on Oct. 25 in hedge fund founder Raj
Rajaratnam's bid to overturn his insider trading conviction on
grounds that the U.S. government improperly won permission to
record his phone conversations.
One-time billionaire Rajaratnam, 55, is serving an 11-year
prison sentence in what prosecutors called the biggest-insider
trading case of a generation. Rajaratnam was the principal
defendant among dozens of money managers, traders, consultants
and lawyers caught up in a crackdown in the past four years of
trading on company secrets.
A panel of three judges on the 2nd U.S. Circuit Court of
Appeals in New York will allow prosecutors and Rajaratnam's
lawyers 15 minutes each to make their arguments, according to
the court's calendar.
Rajaratnam was convicted in May 2011 by a Manhattan federal
court jury on all 14 counts he faced, largely based on FBI
wiretaps. Rajaratnam lost a bid in November 2010 to suppress the
wiretaps before his trial.
Rajaratnam's lawyers contend that when the FBI applied to a
federal judge to tap his cell phone in March 2008, the affidavit
did not provide the judge with all of the information required
for approval under the law.
One fact omitted was that a government informant, Roomy
Khan, had been convicted of wire fraud in the late 1990s after
providing Rajaratnam with inside information.
"The government argues that this Court must close its mind
to the truth and accept its pervasively misleading affidavit at
face value because it was not 'outright false'; it was just
filled with intentionally misleading 'omissions,'" lawyers at
Akin Gump Strauss Hauer & Feld, who represent Rajaratnam, said
in papers filed in the appeal.
Federal prosecutors, in their brief to the appeals court,
noted that six judges approved the wiretaps of Rajaratnam
between March 2008 and November 2008.
"The issuing judges' findings were validated by the wiretap
investigation, which uncovered highly incriminating evidence of
wide-ranging insider trading schemes involving Rajaratnam and
others," the government brief said.
The case is USA v Rajaratnam in the 2nd U.S. Circuit Court
of Appeals, No. 11-4416