Fund boss loses NY bid to stay free during appeal

By the Associated Press | December 1, 2011 | 4:35 PM EST

NEW YORK (AP) — A New York City court has denied a hedge fund founder's long-shot bid to remain free pending appeals of his insider trading conviction and 11-year prison sentence.

The 2nd U.S. Circuit Court of Appeals in Manhattan denied the request Thursday after hearing arguments a day earlier. The 54-year-old Sri Lanka native Raj Rajaratnam (rahj rah-juh-RUHT'-nuhm) was sentenced in October to the longest prison sentence ever to result from an insider trading case. He is scheduled to report to prison Monday. He had asked for leniency because of health problems.

The prosecution of the insider trading case resulted in convictions of more than two dozen people. Prosecutors say Rajaratnam made more than $70 million in illegal profits in trades between 2003 and 2009. The one-time billionaire founded the Galleon Group of hedge funds.