Deliberations in the insider-trading trial of Raj Rajaratnam started over after a juror was dismissed for medical reasons following six days of weighing charges against the Galleon Group LLC co-founder.
Both sides agreed to replace the juror with an alternate, a 39-year-old employee of the Westchester, New York, parks department, bringing the panel to eight women and four men. The original jury began considering securities fraud and conspiracy counts against Rajaratnam in Manhattan federal court April 25.
“The law requires you to base your verdict solely upon the evidence,” U.S. District Judge Richard Holwell told the jury in the courtroom today. “The verdict must represent the verdict of each juror, including the new juror that’s been seated.”
Rajaratnam, 53, was arrested in October 2009 in the largest crackdown on hedge-fund insider trading in U.S. history. Prosecutors, relying in part on wiretaps of the defendant’s phone calls, said he gained $63.8 million from tips leaked by corporate insiders and hedge-fund traders about 15 stocks.
Rajaratnam, who said he based the trades on research, was tried on five counts of conspiracy and nine counts of securities fraud. He faces as long as 20 years in prison if convicted of the most serious charges. The trial began March 8.
The defendant, who was not in court on May 3 because of emergency foot surgery, was also absent today. There were no deliberations yesterday. The departing juror is a 70-year-old retired bookkeeper living in Manhattan.
The deliberations follow six weeks of trial testimony in the largest crackdown on hedge-fund insider trading in U.S. history. The Galleon case was the first one focused exclusively on insider trading in which prosecutors wiretapped their targets’ telephone conversations.
During the trial, jurors listened to more than 40 recordings of Rajaratnam, in some of which he can be heard gathering information from his sources. Last week, the jury asked to re-hear about 15 of the wiretaps.
The jurors hail from Westchester, the Bronx and Manhattan. The panel includes a teacher, an activities therapist for a private nursing home, a nurse, a customer-service representative for the Metropolitan Transportation Authority and a three-decade veteran food-service worker for New York’s Education Department.
The judge told the panel they would have to choose a new foreman. The original foreman is a 56-year-old resident of the Bronx who is a graphic artist and works for Apple Inc.
The case is U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).