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* New York federal appeals court denies "en banc" review
* Hedge fund founder objected to use of wiretaps
By Jonathan Stempel
NEW YORK, Nov 19 (Reuters) - A federal appeals court on Monday refused to disturb the insider trading conviction of Galleon Group hedge fund founder Raj Rajaratnam, one of the most prominent defendants in the U.S. government's wide-ranging probe into insider trading.
Rajaratnam, 56, is serving an 11-year prison term following his May 2011 conviction by a Manhattan federal jury on nine counts of securities fraud and five counts of conspiracy.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York upheld that conviction in June. Monday's order rejected Rajaratnam's request to reconsider that ruling, or have the entire court reconsider it in an "en banc" review.
The 2nd Circuit did not give a reason for its decision, and it is unclear whether Rajaratnam will now ask the U.S. Supreme Court to review his conviction.
Patricia Millett, a lawyer for Rajaratnam, declined to comment.
Much of the government's case was built on the use of wiretaps, a tactic long associated with organized crime cases.
Millett and Paul Clement, a former U.S. solicitor general who worked on Rajaratnam's appeal, argued that the three-judge panel had endorsed a "significant expansion" of wiretaps at odds with decisions of other courts, including the Supreme Court.
They said it effectively gave investigators "carte blanche to wiretap any professional investor whose business entails discussing publicly traded companies on the telephone."
The government said Rajaratnam, whose firm once managed $7 billion, made as much as $63.8 million in illicit profit from 2003 to 2009 from insider trading.
Among his alleged tippers was former Goldman Sachs Group Inc director Rajat Gupta, who is separately appealing his conviction and two-year prison term.
Rajaratnam is the highest-profile hedge fund executive to be convicted in the crackdown on insider trading, which has led to charges against more than 80 people and entities.
On Nov. 8, SAC Capital Advisors LP, the hedge fund overseen by billionaire Steven A. Cohen, pleaded guilty to fraud as part of a $1.2 billion settlement of civil and criminal insider trading charges. Cohen has not been criminally charged.
The case is U.S. v. Rajaratnam, 2nd U.S. Circuit Court of Appeals, No. 11-4416.