Insider trading trial:
Rajaratnam trial in March
Grant McCool
The defence team for accused Galleon hedge fund founder Raj
Rajaratnam is ready to “rock” for next month’s criminal trial on insider
trading charges. In court on Wednesday for the final pretrial hearing,
Rajaratnam briefly stood for the formality of responding to a second
superseding indictment returned by a grand jury on January 20.
“Yes, Your Honour,” and “Not Guilty, Your Honour,” Rajaratnam said in
response to questions from US District Judge Richard Holwell, who will
preside over the six- to eight-week long trial starting on March 8.
Raj Rajaratnam |
Onetime billionaire Rajaratnam is charged with conspiracy to commit
securities fraud which together carry a prison sentence of up to 25
years.
He was arrested and charged in October 2009 and he is the central
figure in what US prosecutors describe as the biggest probe of insider
trading at hedge funds on record. Out of about two dozen people
criminally charged in the case, in which investigators made
unprecedented use of secret recordings of phone conversations in a
white-collar crime probe, 19 have pleaded guilty instead of going to
trial.
“We’ll rock on March 8,” Rajaratnam’s main lawyer, Washington defence
attorney John Dowd, said after the hearing in US District Court in New
York. “It was helpful to tee things up for the judge on the tapes.”
Last November, Rajaratnam lost a bid to suppress the government’s
wiretap evidence.
The court heard on Wednesday that the government could introduce as
many as 173 tape recordings to the jury.
Prosecutors declined to comment after the hearing.
Judge Holwell, who last week postponed the start of the trial to
March 8 from February 28, ruled that he did not see evidence of
“intentional sandbagging” after defence lawyers challenged the
government’s addition of stocks to the case in December and January.
The allegations of insider trading center on a total of 35 stocks,
mostly of technology companies.
Among the companies on which Rajaratnam is accused of receiving or
passing on information are Advanced Micro Device Inc, Google Inc,
Goldman Sachs Group Inc, Atheros Communications Inc and Hilton Hotels
Corp.
Galleon had $7 billion under management at its peak.
The government must prove that Rajaratnam knew that information he
received and on which he traded was provided by insiders who had a
fiduciary duty to keep information confidential about company earnings
reports or mergers and acquisitions.
Federal prosecutors accuse Rajaratnam of making as much as $45
million in trades from confidential information about publicly traded
companies, giving him an unfair advantage in the market.
A prosecutor, Reed Brodsky, and a defence lawyer, Terence Lynam,
sparred in court over expert witnesses that the defence could call to
testify at trial.
“Every day that passes without the government knowing, hurts the
government,” Assistant U.S. Attorney Brodsky said. Lynam said he would
file a written response on expert witnesses and audio recordings by
Friday.
The judge ruled that the jury could hear certain evidence about
profits to the Galleon funds from which Rajaratnam would also have
benefited.
Holwell added, however, that he was “sensitive to the fact that
Rajaratnam is a wealthy man and no one wants the jury to be prejudiced.”
NEW YORK, Reuters |