Judges Send Rajaratnam To Jail

Dec 2 2011 | 9:49am ET

Raj Rajaratnam, the one-time billionaire hedge fund manager convicted on insider-trading, will have to trade his Manhattan penthouse for prison bars on Monday, a federal appeals court has ruled.

The U.S. Second Circuit Court of Appeals in New York yesterday rejected Rajaratnam's bid to remain under house arrest while he appeals his conviction and sentence. "The defendant shall surrender at such time and place as shall be instructed by the district court," which means that the Galleon Group founder will have to move in to the federal prison medical center in Ayer, Mass., after a final weekend at home to begin serving his 11-year sentence.

On Wednesday, Rajaratnam's lawyers told the three-judge panel, including the court's top judge, U.S. Chief Judge Dennis Jacobs, that the use of wiretaps in Rajaratnam's trial was likely to result in an overturning of his conviction and a new trial. But the judges seemed more interested in prosecutors' assertion that Rajaratnam still had the means to flee, possibly to his native Sri Lanka.

The two-sentence order from the appeals court did not explain why the panel denied Rajaratnam's request. But at Wednesday's hearing, Jacobs asked Rajaratnam's lawyer, "Wouldn't he rather be living as a centimillionaire in his own country rather than as a convict in jail?"

What's more, prosecutor Jonathan Streeter added, "people successfully flee all the time," even when, like Rajaratnam, they are subject to electronic monitoring and have surrendered their passports.

The ruling ends Rajaratnam's bid to stay out of jail for now, but his lawyers will try to make sure his stay there is a short one. They plan to appeal Rajaratnam's conviction as well as his sentence, a process that could take over a year.

The prison that Rajaratnam will soon call home, Federal Medical Center Devens, features facilities to treat Rajaratnam's medical ailments, including serious diabetes. His lawyers say that it is likely that Rajaratnam will require a kidney transplant.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

FINalternatives Trending

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Hard Assets Trending

Futures Trending

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.