Rajaratnam Seeks To Stay Out Of Prison

Nov 30 2011 | 1:21pm ET

A federal appeals court declined to rule immediately on Galleon Group founder Raj Rajaratnam's last-minute bid to stay out of jail.

The U.S. Court of Appeals in Manhattan heard arguments this morning from the convicted insider-trader's lawyers that he should be permitted to remain free while they appeal his conviction and 11-year sentence. Rajaratnam's lawyers have argued that there are major questions about the legality of the wiretaps at the heart of the case against their client, and that if those wiretaps are excluded on appeal, a new trial would have to be ordered.

Prosecutors rejected those arguments, and added that Rajaratnam, who remains under house arrest on $100 million bail, is a flight risk with significant assets—despite more than $150 million in fines and restitution—and ties to his native Sri Lanka.

"He's got nothing to go to in Sri Lanka," Patricia Millett, one of Rajaratnam's lawyers, told the court, noting that he has serious health problems that might not be addressable in the impoverished, war-torn country.

If the court doesn't side with Rajaratnam, he'll have to report to prison on Monday in Massachusetts.

Separately, another man convicted in the Galleon case, Emanuel Goffer, won a month-long reprieve from his upcoming three-year sentence. Goffer, the brother of Zvi Goffer, convicted of leading one of two interlocking insider-trading rings in the case, will now report to prison on Jan. 9. Goffer was convicted alongside his brother, a former Galleon trader, and one other man in June.


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