Raj Rajaratnam's Insider Conviction Upheld

Galleon Group co-founder Raj Rajaratnam’s conviction for directing the most extensive insider-trading scheme in U.S. history was upheld by an appeals court, which ruled the government’s use of wiretaps was proper.

Bloomberg reports that the U.S. Court of Appeals in Manhattan, in a decision issued today, affirmed Rajaratnam’s 2011 conviction for conspiracy and securities fraud and rejected his challenge to the use of wiretaps in a securities-fraud case.

The hedge-fund manager argued his conviction should be vacated because prosecutors misled the lower court judge who authorized the wiretaps in 2008. Raj Rajaratnam, 56, claimed prosecutors and Federal Bureau of Investigation agents omitted key facts from their request for the secret recordings, called Title III wiretaps, including the existence of an insider-trading investigation by the U.S. Securities and Exchange Commission.

'Rajaratnam’s arguments are not persuasive', U.S. Circuit judges Jose Cabranes, Robert Sack and Susan Carney said in a 29-page ruling. 'The record does not support the finding that the omission of the SEC investigation in the Title III wiretap application was made with ‘reckless disregard for the truth'.

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Raj Rajaratnam Insider Conviction Upheld by Appeals Court

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