NEW YORK (TheStreet) - Former Galleon Group Hedge Fund Manager Raj Rajaratnam will report to prison on Monday Dec. 5, after a judge ruled that he will have to stay in jail as he contests his insider trading conviction, The New York Times reports.
Since his October sentancing, Rajaratnam has remained free on bail in his home. During the hearing, the judges showed concerns of Rajaratnam's flight risk and potential flee to Sri Lanka, according to the Times.
In October, Rajaratnam was sentenced to eleven years in prison for his key role in an insider trading web that spanned Wall Street and hedge funds. A near five year inquest by the Securities and Exchange Commission has so far led to over fifty arrests and to more than two dozen convictions.
In May, Rajaratnam was convicted on all fourteen counts set against him. At that time, prosecutors asked that Rajaratman be remanded in custody because of risks that he might flee to Sri Lanka, however, the judge on the case ordered that Rajaratnam be detained at home with electronic monitoring instead.After an October sentencing, the harshest ever for insider trading, Rajaratnam was ordered by U.S. District Court Judge Jed Rakoff to $92.8 million fine for insider trading in a civil case brought by the SEC in November. Prosecutors began building a case against Rajaratnam using wiretaps starting in 2008 for a nine-month stretch. In those wiretaps, Rajaratnam was recorded passing on various insider trading tips. In appealing insider trading convictions, Rajaratnam and his lawyers are likely to challenge those wiretap recordings on grounds that they were attained in an illegal fashion. While arguing for Rajaratnam's continued home detention, his lawyers stressed that he posed no flight risk to his native Sri Lanka In October, federal prosecutors charged Rajat K. Gupta, the former director and board member of Goldman Sachs (GS). and head of McKinsey & Company with insider trading for his involvement with Gupta and Galleon Group. After a 9 year tenure running McKinsey, Gupta became a director at Goldman, Procter & Gamble (PG) and American Airlines (AMR) as well as philanthropic organizations like the Bill and Melinda Gates Foundation. If convicted, he would be the highest profile executive to be caught up in the Galleon inquest.
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