U.S. Supreme Court Rejects Raj Rajaratnam Appeal

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 [e-mail]

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