RAJ SEEKS REFUND
Asks for $ 50M back
Convicted inside trader Raj Rajaratnam wants his money back.
The disgraced investor has asked a judge to order the government to return $ 50 million of the $ 63.8 million he forked over in penalties following his 2011 conviction on 14 counts of securities fraud.
Rajaratnam, currently serving an 11year prison stretch — the longest sentence handed down to any of the 80 others caught in Manhattan US Attorney Preet Bharara’s yearslong insider trading probe— also wants his convictions tossed, according to court papers filed late Tuesday.
The plea by Rajaratnam, the founder of nowdefunct hedge fund Galleon Group, mimics those of a handful of Wall Street players caught in Bharara’s dragnet — all of whom are arguing that a new, narrower definition of insider trading should nix their convictions.
Rajaratnam is asking that five counts of his conviction be vacated and a new trial ordered on two others because the government’s case was built on a legal theory that was rejected by an appeals court in December.
Last year, the appeals court held that insider trading convictions require that the person who receives the insider tip knowthat the tipper received an “objective consequential” benefit for providing the illicit information.
The appeals court threw out the convictions of Todd Newman and Anthony Chiasson as a result. The decision also threatened to upend the strategy Bharara had used to secure so many convictions.
At Rajaratnam’s trial, the government only had to prove that he knew that the insider who provided the tip “personally benefited” in some way, his lawyers argued in Tuesday’s motion.
Moreover, one of the key government witnesses at Rajaratnam’s trial, Anil Kumar, changed his testimony three years later when he testified at the trial of Rajaratnam’s brother, Rengan, who was acquitted.
By that time, Kumar had secured two years probation for his cooperation and guilty plea. Rajaratnam’s lawyers allege that Kumar perjured himself in the earlier trial, tainting several of the counts against Rajaratnam.
But lawyers familiar with the cases doubt Rajaratnam will succeed in his bid to free himself.
“I would be surprised if there were any hope for Raj,” said one prominent whitecollar lawyer.