WASHINGTON--The U.S. Supreme Court on Monday declined to
consider a challenge by Galleon Group hedge-fund founder Raj
Rajaratnam to his 2011 conviction for insider trading.
Mr. Rajaratnam was convicted of 14 counts of securities fraud
and conspiracy for trading on sensitive inside information on an
array of companies, including Goldman Sachs Group Inc. The closely
watched case was a milestone for federal prosecutors who have made
a push to crack down on insider trading. The former hedge-fund star
is serving an 11-year prison term and was fined $10 million and
ordered to forfeit more than $53 million.
Mr. Rajaratnam, argued in a petition to the Supreme Court that
the trial judge should have suppressed evidence obtained by the
government's wiretap of his cellphone. He also said instructions to
the jury were faulty because they allowed for a conviction even if
his stock trades didn't rely upon inside information in any
meaningful way.
The Justice Department urged the court to stay out of the case
and leave the conviction in place. Any alleged error in the jury
instructions was harmless because there was "overwhelming evidence"
that Mr. Rajaratnam's trades "were the direct and immediate result
of his receipt of inside information," the department said.
The Second U.S. Circuit Court of Appeals in New York affirmed
Mr. Rajaratnam's conviction last year, saying his arguments were
unpersuasive.
The Supreme Court let that ruling stand without comment. The
court's action comes the week after it rejected a plea from former
Goldman Sachs director Rajat Gupta to remain free on bail while he
continues to challenge his conviction for passing along inside
information to Mr. Rajaratnam.
Write to Brent Kendall at brent.kendall@wsj.com
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