Securities fraud: Raj Rajaratnam's plea against conviction rejected

NEW YORK: A US court has denied a bid by billionaire hedge fund founder Raj Rajaratnam, convicted in May this year on insider trading charges, to reverse the verdict handed by the jury in his case.

US District Judge Richard Holwell examined all the 14 counts of conspiracy and securities fraud on which Rajaratnam was convicted at his closely watched insider trading trial.

Sri Lanka-born Rajaratnam founded the Galleon Group of hedge funds before becoming embroiled in the biggest hedge fund insider trading case in US history, in which according to prosecutors he earned more than USD 50 million in profits from his trades.

Laying out reasons in a 48 page opinion, Holwell said the government presented sufficient evidence for a conviction and rejected Rajaratnam's request to have his conviction set aside.

"A reasonable jury could have found Rajaratnam guilty as to Count One [conspiracy] on the basis of Smith's testimony alone," the judge said, referring to the testimony of Adam Smith, one of three cooperating witnesses who testified for the government at trial.

Rajaratnam's lawyers had argued at the trial that his trading was based on legitimate research and publicly available information and not on secret insider information.

Rajaratnam's lawyers didn't immediately comment. Rajaratnam is scheduled to be sentenced next month on the charges.

A report in the Wall Street Journal said Rajaratnam had argued in his post-trial motions that the court should set aside his conviction because prosecutors failed to introduce sufficient evidence for a reasonable jury to find beyond a reasonable doubt that he had committed a crime.

Rajaratnam is expected to appeal his conviction after his sentencing, it added.

In court filings last week, federal prosecutors sought a maximum prison term of over 24 years for the hedge fund founder, calling him "the modern face of illegal insider trading."

However, Rajaratnam's lawyers argued in court papers he should receive a lenient sentence, saying he suffers from health problems and will likely die in prison if given a lengthy sentence.

"Rajaratnam is not a healthy man, and his death will be hastened by a term of imprisonment," his lawyers had said.