December 05, 2011, 1:10 PM —
A judge has ordered Raj Rajaratnam, who was convicted of a massive insider trading scheme involving shares in technology and other companies, to start serving his 11 year jail sentence today.
Rajaratnam had hoped to stay at home pending the result of his appeal, but last week a New York court in Lower Manhattan rejected that request.
The founder of the Galleon hedge fund, Rajaratnam was found to have netted $50 million (£32 million) trading on inside knowledge of IBM, AMD, 3Com, Google, Intel and Goldman Sachs plans. He will arrive at a federal prison in Massachusetts today.
Rajaratnam maintains that he did not break any rules, and that he only traded on information that was gleaned from good research.
During the trial prosecutors played recorded phone calls of him discussing potentially sensitive business information with a string of people. The individuals included a former beauty queen, and many of them had personal or business relationships with executives at the companies whose shares were traded.
Rajaratnam's lawyers are expected to argue that the recordings should not have been made or allowed to be played in court, under current law.
They have also stated that the jail sentence presented a risk to their client, because of his ongoing health problems, including diabetes. Rajaratnam is also waiting for a kidney transplant.