Rajaratnam Jury Still Out
The prosecution figures Rajaratnam, who did not take the stand, made $63.8 million on the tips he got
By: Maureen O'Gara
May. 2, 2011 07:45 AM
A New York federal jury got the Raj Rajaratnam insider trading case Monday around noon and so far no decision.
It did ask for a bunch of the government wiretaps to be replayed on Tuesday and Wednesday and it's supposed to deliberate for a few hours on Friday, then resume again Monday full-time if it hasn't reached a verdict yet.
The judge denied the jury transcripts of the recorded conversations and witness testimony.
The replayed taps included calls between Rajaratnam and former Intel executive Rajiv Goel and former McKinsey consultant Anil Kumar. Both men testified against him at the trial after pleading guilty themselves in the case. The Goel tap revolved around an Intel-backed Clearwire-Sprint Nextel venture and the Kumar tap about the Abu Dhabi investment in AMD.
The jury also had a tap of a conversion between Rajaratnam and Galleon employee Ian Horowitz about the timing of the AMD deal replayed as well as a call in which Rajaratnam tells two employees to create an "e-mail trail" of purported research on AMD spin-off Spansion, the subject of another one of his allegedly illegal tips, along with a conversation between Rajaratnam and his brother appraising another McKinsey consultant as a possible tipster.
The alleged ringleader of a virtual syndicate using inside information to make illegal trades in a litany of high-tech stocks, the billionaire founder of the Galleon hedge fund is the only one of 26 people charged in the case, including the former head of IBM's server operation Robert Moffat, to plead not guilty to allegations of conspiracy and securities fraud.
The jury started hearing the case March 8 and now has to choose between the damning evidence it heard on the government's secret wiretaps and Rajaratnam's thin defense that he was being fed public information and that the prosecution's key witnesses all lied to save their own skins.
Moffat, for one, has been in prison since November, with expectations of being released next month. Attorney Jason Goldfarb pleaded guilty Monday morning to charges he leaked information on 3Com acquisitions in 2007 and 2008. He is expected to serve 37-46 months in jail.
The prosecution figures Rajaratnam, who did not take the stand, made $63.8 million on the tips he got. He is facing 20 years in prison on each of nine counts of securities fraud - and five years on each of the five counts of conspiracy - if convicted. On a practical level that could work out to 25 years.
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