Rajaratnam Jury Starts Over With New Juror, Replays Wiretaps
Jurors in the insider-trading trial of Raj Rajaratnam restarted deliberations after one juror was replaced for medical reasons, and the panel reheard recordings of wiretapped conversations that were played for them last week.
With an alternate seated as the new Juror 2, U.S. District Judge Richard Holwell in Manhattan today told the eight women and four men to begin weighing the charges anew. The panel later asked to hear 12 wiretaps of Rajaratnam’s phone conversations, nine of which had been played before for the jurors, who began the first round of deliberations April 25.
One of the three new recordings captured a conversation in which former McKinsey & Co. partner Anil Kumar told Galleon Group LLC co-founder Rajaratnam, 53, about “massive layoffs on Monday,” which prosecutors said was a tip about job cuts at EBay Inc. (EBAY)
“I love that they’re listening to these calls,” Assistant U.S. Attorney Reed Brodsky told the judge after the jurors left the courtroom. “Some of these calls are fantastic for the government.”
Holwell again refused a U.S. request to give transcripts of the recordings to the jury. The prosecution said jurors may not know precisely which recordings to ask for because they lack a master list and transcripts.
Rajaratnam 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 earlier this week because of emergency foot surgery, was also absent today. There were no deliberations yesterday as unspecified medical considerations prevented the former Juror 2 from coming to court.
The woman, a 70-year-old retired bookkeeper, lives on Manhattan’s Upper West Side. The alternate named to replace her is a 39-year-old employee of the Westchester, New York, parks department. Three of the jurors now on the panel were originally chosen as alternates. Three alternates remain.
“Beginning anew is the same duty it always was. The law requires you to base your verdict solely upon the evidence,” Holwell told the jury. “The verdict must represent the verdict of each juror, including the new juror that’s been seated.”
Jurors will have to decide for themselves how to start over, said Stephen Miller, a former federal prosecutor in New York and Philadelphia now in private practice at Cozen O’Connor.
“There’s no one standing over them giving them an A-plus or a C-plus on their deliberations,” said Miller. “It’s totally self-governed.”
The change, which will probably delay a verdict, doesn’t necessarily favor one side or the other, Miller said.
Holwell today also said he sealed “several transcripts of proceedings,” without providing details of their subject. In a one-page order, Holwell cited “the secrecy and integrity of jury deliberations and privacy of deliberating jurors.”
Holwell has held a number of nonpublic hearings, during the trial and deliberations, and ordered the transcripts sealed.
The deliberations follow six weeks of trial testimony. 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.
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 case is U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).
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