The Supreme Court rejected the appeal of former hedge-fund king Raj Rajaratnam to overturn his conviction and 11-year prison sentence for insider trading.
Rajartnam, the founder of once high-flying Galleon Group, was convicted on 14 counts of securities fraud and conspiracy in 2011. Besides the prison term he is serving, he also was fined $10 million and ordered to forfeit more than $53 million.
The former hedge-fund king argued on appeal that the trial judge should not have allowed prosecutors to use evidence obtained by a government wiretap of his cellphone. He also said prosecutors did not prove that inside information played a key role in his winning trades.
The Justice Department told the Supreme Court that it provided more than enough evidence that Rajaratnam's trades were the “direct and immediate result of his receipt of inside information,” the department said. The U.S. 2nd Circuit Court of Appeals in New York City upheld Rajaratnam's conviction last year.
The Supreme Court’s decision to let Rajaratnam’s convictions stand comes one week after it rejected a plea from former Goldman Sachs director Rajat Gupta to remain free on bail while he challenges his conviction for passing inside information to Rajaratnam.
The Galleon Group was one of the largest hedge funds in the world before shuttering in 2009 after Rajaratnam and five others were arrested and charged with operating a wide-ranging insider-trading operation.