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Galleon hedge fund founder Raj Rajaratnam departs Manhattan Federal Court after his sentencing in New York October 13, 2011. Rajaratnam, a self-made hedge fund tycoon convicted in the biggest Wall Street trading scandal in a generation, was ordered on Thursday to serve 11 years in prison, one of the longest sentences ever in an insider-trading case but far less than prosecutors sought. REUTERS/File photo
NEW YORK (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.
By a 3-0 vote, 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, citing “society’s strong interest in the finality of criminal convictions.” It also said Rajaratnam did not show he was “actually innocent.”
The court also rejected Rajaratnam’s challenge to his $53.8 million forfeiture order.
Jurors had convicted the Sri Lankan native 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, declined to 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 from2003 to 2009 through insider trading in stocks such as eBay Inc, Goldman Sachs Group Inc (GS.N) and Google Inc, nowcalled 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.
