Ex-Galleon Group LLC trader Rengan Rajaratnam’s jury was picked for an the insider-trading case in which the U.S. says he used illegal tips provided by his older brother, imprisoned billionaire fund manager Raj Rajaratnam.
The panel of seven women and five men, which includes a sanitation worker and a history professor, will return to Manhattan federal court tomorrow to hear opening statements and testimony during a trial that U.S. District Judge Naomi Reice Buchwald has said could last as long as three weeks.
Rengan Rajaratnam, 43, who worked his way up through Steven Cohen’s SAC Capital Advisors LP and Galleon Group, the hedge fund co-founded by his brother, faces two counts of securities fraud and one count of conspiracy to commit insider trading stemming from trades of Clearwire Corp. and Advanced Micro Devices Inc. in 2008. Securities fraud carries a 20-year maximum prison sentence, while conspiracy carries a term of as long as five years.
Prosecutors in the office of Manhattan U.S. Attorney Preet Bharara won permission to play several of the more than 45 court-authorized wiretaps of telephone calls used to send Raj Rajaratnam to prison for 11 years, including several conversations between the brothers.
The U.S. says they may also call as many as five cooperating witnesses, including two former classmates of Raj Rajaratnam’s from the Wharton School of the University of Pennsylvania who pleaded guilty and testified against him at trial. Raj Rajaratnam was convicted in 2011 of the most wide-ranging insider-trading ring in U.S. history that also included former Goldman Sachs Group Inc. director Rajat Gupta.
Gupta was convicted in 2012 of passing illegal tips to Raj Rajaratnam. Gupta reported today to the Federal Medical Center Devens to begin serving a two-year sentence, where he’s assigned to a minimum-security satellite camp, said Ed Ross, a spokesman for the Federal Bureau of Prisons. Rajaratnam is serving his term in the complex’s medical prison. Inmates in the two facilities, located in Ayer, Massachusetts, don’t generally cross paths, Ross said.
Buchwald spent about seven hours today questioning prospective jurors to see if they held any bias against Wall Street. At least seven said they had heard about the case, causing the judge to quip outside the jury’s presence, “All sorts of people can now pronounce the name ‘Rajaratnam.’”
One potential juror was excused after a member of the prosecution team identified him as being the former high school teacher of Samuel Moon, a Federal Bureau of Investigation agent assigned to the case.
“It turns out there’s a long-time connection between the agent and a juror,” Buchwald explained as the jury candidate stopped briefly before Moon after he was excused from the case.
“I taught you math? At Bronx Science? Did you like my class? I’m glad you made it,” the potential juror said with a wide grin as he strode out of the courtroom.
The case is U.S. v. Rajaratnam, 13-cr-00211, U.S. District Court, Southern District of New York (Manhattan).