ETF News

Rajaratnam fails to cut U.S. insider trading conviction, sentence

NEW YORK, June 1 (Reuters) - A federal appeals court on Friday rejected a bid by Raj Rajaratnam, the highest-profile hedge fund manager convicted in a sweeping U.S. crackdown on insider trading, to void much of his 2011 conviction and shorten his 11-year prison term.

The 2nd U.S. Circuit Court of Appeals in Manhattan said the Galleon Group founder waived his claim that his trades did not qualify as insider trading by not raising it in an earlier appeal, and did not show he was “actually innocent.” It also rejected Rajaratnam’s challenge to his $53.8 million forfeiture order.

Jurors had convicted the Sri Lankan-born Rajaratnam in May 2011 on 14 securities fraud and conspiracy counts.

The appeals court upheld that conviction in June 2013. Rajaratnam’s latest appeal challenged five counts and his culpability for a trade underlying a sixth.

Christine Chung, a lawyer for Rajaratnam, did not immediately respond to requests for comment.

The insider trading probe was led by the office of former U.S. Attorney Preet Bharara in Manhattan, and had since 2009 resulted in more than 80 convictions and guilty pleas.

Prosecutors said Rajaratnam made up to $63.8 million from 2003 to 2009 through insider trading in stocks such as eBay Inc , Goldman Sachs Group Inc and Google Inc, now called Alphabet Inc.

Rajaratnam, 60, is eligible for release in July 2021.

The case is Rajaratnam v U.S., 2nd U.S. Circuit Court of Appeals, No. 17-1405. (Reporting by Jonathan Stempel in New York Editing by Susan Thomas)