Rajaratnam Criminal Trial Begins With Jury Selection in Manhattan Court
Rajaratnam Criminal Insider Trading Trial Begins in U.S.
Peter Foley/Bloomberg
Raj Rajaratnam, the Galleon Group co-founder accused of insider trading, arrives at federal court for the start of his trial in New York.
Raj Rajaratnam, the Galleon Group co-founder accused of insider trading, arrives at federal court for the start of his trial in New York. Photographer: Peter Foley/Bloomberg
March 8 (Bloomberg) -- Raj Rajaratnam, co-founder of Galleon Group LLC, arrives in federal court in Manhattan as jury selection begins in his insider-trading trial. Rajaratnam is accused of making $45 million in illicit trades from inside tips and faces as much as 20 years in prison on the most serious charges if convicted. Bloomberg's Jon Erlichman reports. (Source: Bloomberg)
March 8 (Bloomberg) -- Seth Berenzweig, managing partner at Berenzweig Leonard, talks about the criminal trial of Galleon Group LLC co-founder Raj Rajaratnam beginning today and U.S. efforts to prosecute insider-trading cases. Rajaratnam is accused of making $45 million from confidential information leaked by corporate insiders and hedge fund traders. Berenzweig talks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
March 8 (Bloomberg) -- The criminal trial of Galleon Group LLC co-founder Raj Rajaratnam began in federal court in Manhattan today as more than 100 potential jurors were assembled to be questioned about their views of Wall Street, hedge fund managers and the recession. Rajaratnam is accused of making $45 million from confidential information leaked by corporate insiders and hedge fund traders. Bloomberg's Suzanne O'Halloran reports. (Source: Bloomberg)
March 8 (Bloomberg) -- The trial of Galleon Group LLC co-founder Raj Rajaratnam is set to begin today in federal court in Manhattan. The Sri Lankan-born money manager is accused of making $45 million from confidential information leaked by corporate insiders and hedge fund traders. Rajaratnam denies wrongdoing and has argued that investment advisers routinely speak to company insiders as they do research. Bloomberg's Jon Erlichman reports. (Source: Bloomberg)
March 8 (Bloomberg) -- James DeVita, a lawyer with Day Pitney LLP, discusses the first day of jury selection in the trial of Raj Rajaratnam. Rajaratnam, the co-founder of hedge-fund company Galleon Group LLC, is accused of making $45 million in illicit trades from insider tips. DeVita speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
March 8 (Bloomberg) -- Lawrence "Larry" McMichael, partner at law firm Dilworth Paxson, talks about the insider-trading trial against Galleon Group LLC co-founder Raj Rajaratnam, set to begin today in federal court in Manhattan. McMichael speaks with Deirdre Bolton on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
March 8 (Bloomberg) -- Douglas Burns, a formal federal prosecutor, discusses the outlook for the trial of Galleon Group LLC co-founder Raj Rajaratnam, which begins today in federal court in Manhattan. Rajaratnam, 53, is the central figure in the largest crackdown on hedge-fund insider trading in U.S. history. The Sri Lankan-born money manager is accused of making $45 million from confidential information leaked by corporate insiders and hedge fund traders. Burns talks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Galleon Group LLC co-founder Raj Rajaratnam’s criminal trial began today with about 110 potential jurors assembling in Manhattan federal court to answer questions about their views of Wall Street, hedge-fund managers and the recession.
U.S. District Judge Richard Holwell today read items from a 15-page questionnaire to 40 of the potential jurors, who are drawn from eight counties in New York state. In most cases, people who responded “yes” to a question were called to the bench to answer further queries in private.
“As we all know, a lot of people on Wall Street make a lot of money,” according to the questionnaire, which Holwell disclosed yesterday. “Does anyone think that evidence about wealthy individuals and multimillion-dollar transactions will make it difficult for you to decide the case fairly?”
The judge excused two potential jurors based on their answers to that question. Others were excused because of health problems, information they had heard about the case or personal stock holdings. Jury selection will continue this afternoon.
Rajaratnam, 53, is the central figure in the largest crackdown on hedge-fund insider trading in U.S. history. The Sri Lankan-born money manager is accused of making $45 million from confidential information leaked by corporate insiders and hedge- fund traders. He may spend as long as 20 years in prison if convicted of fraud.
He denies wrongdoing and has argued that investment advisers routinely speak to company insiders as they do research.
Crowd Murmurs
Holwell elicited a murmur from the group when he said the trial would last 2 1/2 months. The judge has said previously that of the 300 people summoned for jury duty in the case, half had been excused for hardship reasons. Prosecutors and defense attorneys are to select 12 jurors and 6 alternates from the remaining pool.
In the courtroom, there was a row of two tables for the defendant and the seven lawyers who accompanied him today. Rajaratnam sat at the far left of the second table, as far away from the jury box as possible. In the first row were his lead lawyers, John Dowd and Terence Lynam of Akin Gump Strauss Hauer & Feld LLP. The government team consists of six people, at least three of whom are assistant U.S. attorneys.
Witness List
At today’s proceeding, Holwell read out a list of potential witnesses who may be called and subjects that may be discussed during the trial. The list included Rajaratnam’s two brothers, as well as Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd C. Blankfein, former McKinsey & Co. managing partner and Goldman board member Rajat Gupta, and former Intel Corp. (INTC) employee Rajiv Goel. Goel has said he tipped Rajaratnam about Intel’s earnings.
The questionnaire asks about potential jurors’ views on the financial industry and the recession.
“Of course, many of us have been hurt by the recession and we all have opinions as to whether someone is to blame for it,” the questionnaire says. “Does the fact that the case involves the financial industry, Wall Street executives, hedge funds, mutual funds and the like, make it difficult for anyone to render a fair verdict?”
Holwell’s questionnaire also asks potential jurors about their views on insider trading and regulatory and criminal prosecutions of such cases: “Does anyone have any feelings, for or against the insider trading laws that would make it difficult to render a fair and impartial verdict?”
Heritage Questions
The questionnaire probes potential jurors’ feelings about Americans with an Indian or South Asian heritage: “Is there anything about this fact that would affect your ability to be impartial?”
Holwell initially rejected using such a questionnaire. Last week, defense lawyers argued that prospective jurors should be questioned about bias in light of a civil action filed March 1 by the U.S. Securities and Exchange Commission against Gupta accusing him leaking stock tips to Rajaratnam.
The SEC alleged that Gupta provided inside information to Rajaratnam, including news of Berkshire Hathaway Inc.’s $5 billion investment in Goldman Sachs and Goldman Sachs earnings, as well as earnings at Procter & Gamble Co. (PG) Prosecutors said at a March 4 hearing that Gupta was “a conspirator” with Rajaratnam in the insider-trading scheme.
“These allegations first made by the SEC are totally baseless,” Gary Naftalis, Gupta’s lawyer, said in a statement.
The case is U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net
To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net
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