| NEW YORK, March 3
NEW YORK, March 3 A federal judge on Friday
rejected Galleon Group hedge fund founder Raj Rajaratnam's bid
to void much of his insider trading conviction and shorten his
11-year prison sentence.
U.S. District Judge Loretta Preska, in Manhattan, said
Rajaratnam failed to show his actual innocence on five of the 14
counts on which he was convicted, or that two other counts
should be vacated because the main government witness committed
She also rejected Rajaratnam's argument that his trial
counsel was ineffective, and denied Rajaratnam's bid to reduce
the $53.8 million that he had agreed to forfeit to about $4.3
Christine Chung, a lawyer for Rajaratnam, did not
immediately respond to requests for comment. U.S. Attorney Preet
Bharara in Manhattan declined to comment through a spokeswoman.
Rajaratnam, 59, is the highest-profile fund manager targeted
in Bharara's sweeping insider trading crackdown, which since
2009 has resulted in more than 80 convictions and guilty pleas.
Prosecutors said Rajaratnam made up to $63.8 million from
2003 to 2009 through insider trading in stocks such as eBay Inc
, Goldman Sachs Group Inc and Google Inc, now
called Alphabet Inc.
Rajaratnam was convicted in May 2011 on nine counts of
securities fraud and five counts of conspiracy. He has served
5-1/4 years in prison and will be eligible for release in July
In seeking a shorter sentence, Rajaratnam said he did not
provide benefits to insiders for confidential information
related to trades underlying five of the counts or know that
insiders provided that information for the sake of any benefit.
On Dec. 6, the U.S. Supreme Court ruled in a separate case
that a gift of confidential information could violate securities
laws even if the recipient did not give a tangible benefit in
Preska wrote: "Here, because all the information was
transferred between trading relatives or friends, the mere
transfer of information is sufficient to constitute a benefit."
Rajaratnam, moreover, "had knowledge that inside information
was being conferred in exchange for such benefit," she added.
The judge also rejected Rajaratnam's claim that former
McKinsey & Co partner Anil Kumar perjured himself at trial,
citing alleged contradictory testimony that Kumar gave three
years later at a trial against Rajaratnam's younger brother,
Preska said the alleged conflicting testimony was not
material, and that "a faulty memory resulting in inaccuracies or
mistakes" does not mean perjury occurred.
Rengan Rajaratnam was acquitted in July 2014 of conspiring
to engage in insider trading.
The cases are U.S. v. Rajaratnam, U.S. District Court,
Southern District of New York, No. 09-cr-01184; and Rajaratnam v
U.S. in the same court, No. 15-05325.
(Reporting by Jonathan Stempel in New York; Editing by Leslie