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Rajaratnam’s insider-trading appeal set for October 25

One-time billionaire Rajaratnam,55,is serving an 11-year prison sentence in what prosecutors called the biggest insider trading case of a generation.

Written by Reuters | New York |
September 9, 2012 12:42:53 am

A federal appeals court will hear oral arguments on October 25 in hedge fund founder Raj Rajaratnam’s bid to overturn his insider trading conviction on grounds that the US 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 Wall Street insiders illegally obtaining company secrets and trading on the information.

Rajaratnam was convicted in May 2011 in Manhattan federal court on 14 counts of securities fraud and conspiracy,largely based on the FBI’s secret recordings of his conversations,which were played to the jury.

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Rajaratnam lost a bid in November 2010 to suppress the wiretaps as evidence in 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.

Federal prosecutors,in their brief to the appeals court,noted that six judges approved the wiretaps of Rajaratnam between March 2008 and November 2008.

One of the other defendants,former Intel Corp executive Rajiv Goel,is seeking a noncustodial punishment when a judge sentences him on September 12,according to court filings on Friday.

Goel,a onetime friend and business associate of Rajaratnam,was among several people who testified against the money manager at his trial.

Prosecutors said Goel “substantially aided” the prosecution of Rajaratnam. Goel pleaded guilty to securities fraud and conspiracy charges after he admitted telling his friend about confidential Intel information in 2007 and 2008.

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