A federal appeals court has upheld the conviction of Raj Rajaratnam, the former hedge fund manager who was charged with orchestrating a vast insider trading conspiracy.
“Rajaratnam’s arguments are not persuasive,†said the the United States Court of Appeals for the Second Circuit in Manhattan in a decision published on Monday.
Mr. Rajaratnam’s lawyers had argued that federal prosecutors had used deceptive methods to obtain permission from a judge to wiretap his cellphone. They accused the government government left out key information from its wiretap application, including that the was already conducting its own investigation.
The contents of those wiretapped conversations, on which Mr. Rajaratnam and his accomplices freely swapped confidential information about publicly traded companies, led a jury to find Mr. Rajaratnam guilty after a two-month trial in 2011. He is serving an 11-year sentence at a federal prison in Ayer, Massachusetts.
Judge Jose Cabranes, writing for a unanimous three-judge panel, ruled that the trial-court judge, Richard J. Holwell, properly analyzed the alleged mistakes in the government’s application to wiretap Mr. Rajaratnam’s phone.
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“We cannot conclude that the government omitted certain information about the S.E.C. investigation with ‘reckless disregard for the truth,’†wrote Judge Cabranes, who also rejected an argument by Mr. Rajarartnam’s lawyers that Judge Holwell gave the jury erroneous instructions.
Had th! e appeals court ruled in Mr. Rajaratnam’s favor, the government would have been forced to retry Mr. Rajaratnam without the 45 secretly recorded telephone calls that prosecutors played for the jury during the trial.
The decision does not substantially impact the appeal of Rajat K. Gupta, the former Goldman director convicted of leaking the bank’s boardroom secrets to Mr. Rajaratnam. While Mr. Gupta’s appeal, which was argued last month, also relates to the admissibility of Mr. Rajaratnam’s wiretapped conversations, it centers on different legal issues connected to evidentiary rulings by Judge Jed S. Rakoff, the trial court judge in that case.
Most of the legal players in the Rajaratnam trial have moved on. Judge Holwell left the bench and is now in private practice. All three prosecutors that tried him are now crimina defense lawyers: Reed Brodsky is at Gibson Dunn & Crutcher; Andrew Michaelson is at Boies Schiller & Flexner; and Jonathan Streeter is at Dechert.
And Patricia A. Millett of Akin Gump Strauss Hauer & Feld, the lawyer who argued Mr. Rajartnam’s appeal, was nominated earlier this month by President Obama to the federal appeals court in Washington.
Through a spokeswoman, Ms. Millett declined to comment on the ruling. Ellen Davis, a spokeswoman for the United States attorney’s office in Manhattan, also declined to comment.
