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Raj Rajaratnam, the billionaire founder of the hedge fund Galleon Group, was convicted Wednesday on all 14 counts of insider trading. The federal jury reached its verdict on nine counts of securities fraud and five of conspiracy on its twelfth day of deliberations.
Reuters reported that during the two-month trial, prosecutors argued that Rajaratnam had cheated, using an unfair advantage in the stock market and amassing $63.8 million in illegal profits while defense attorneys claimed his trades were influenced not by insider information but by a body of research and public information.
Prosecutors have asked that Rajaratnam be jailed pending sentencing by U.S. District Judge Richard Holwell. He faces a prison term of up to 25 years. Once the verdict was announced and the jury had vacated the courtroom, a hearing began to determine whether he will be incarcerated until sentence is passed down. It was determined that he will remain free on bail under house arrest, but will be subject to electronic monitoring.
Rajaratnams chief attorney, John Dowd, said he planned to appeal use by the prosecution of secretly recorded conversations. Those conversations are believe to have heavily influenced the verdict by strengthening the insider trading charges. Chicago securities lawyer Andrew Stoltmann characterized their use this way in the report: "Wiretaps are a game changer on Wall Street. That is the reason Raj Rajaratnam will spend a very long time in prison."