Rajaratnam guilt overwhelming: U.S. closes at trial
Raj Rajaratnam wanted to conquer the stock market at the expense of the law, a U.S. prosecutor said in closing arguments of the hedge fund manager's insider trading trial on Wednesday.
Rajaratnam's voice repeatedly rumbled over speakers in a New York courtroom as prosecutor Reed Brodsky replayed excerpts of phone taps to remind the jury that the Galleon Group founder timed his stock trades sometimes seconds after learning corporate secrets.
You heard the defendant committing his crimes time and time again in his own words, Brodsky told the jury in summing up the government's evidence that Rajaratnam made an illicit $63.8 million between 2003 and March 2009.
He said the case demonstrated overwhelming evidence of Rajaratnam's guilt in the government's biggest probe of insider trading at hedge funds on record.
In a 4-1/2-hour summation, Brodsky cited one example after another of Rajaratnam's reliance on inside information and attempts to cover up his knowledge through email trails and patterns of buying and selling stocks.
The defendant's insider trading scheme helped him pad his profits that kept him at the top in a game to be the best, and conquer the stock market at the expense of the law, Brodsky told the 12 jurors and four alternates.
Chief defense lawyer John Dowd was to take his turn next in summing up the case on behalf of Rajaratnam.
The 53-year-old one-time billionaire sat expressionless in the crowded courtroom, surrounded by at least 10 lawyers and a few friends, as Brodsky emphasized signature pieces of government evidence against him.
In presenting the defense side of the trial, Rajaratnam's lawyers showed jurors a slew of graphs, charts and other documents to argue their client relied on public information and old-fashioned research to make trades. Rajaratnam, who was born in Sri Lanka and has lived most of his life in the United States, did not take the witness stand in his defense.
The trial has played out the way many of us believed it would, said Andrew Stoltmann, a securities lawyer in Chicago who is not involved in the case. It is tough to overcome the witnesses and the defendant's own voice, so those two things will send him to prison for a very long time.
The jury could start deliberations late on Thursday or on Monday. Friday is a holiday.
GOLDMAN LEAKS
Rajaratnam is the central figure in a sweeping U.S. government probe of insider trading at hedge funds, and the only defendant so far to go on trial.
If convicted, Rajaratnam could face up to 25 years in prison on charges of conspiracy and securities fraud relating to secrets about earnings or acquisition activity of more than a dozen companies.
They included chipmakers Advanced Micro Devices Inc
Brodsky said Rajaratnam orchestrated a series of conspiracies to get tips, including one involving Rajat Gupta, a former worldwide managing director at consultancy McKinsey & Co who also sat on the board of Goldman Sachs Group Inc.
Recalling trial testimony from Goldman Chief Executive Lloyd Blankfein, Brodsky said Gupta repeatedly told Rajaratnam about the Wall Street bank's private board discussions.
Within seconds of hearing great news from Gupta in September 2008, which turned out to be a critical $5 billion investment in Goldman by Warren Buffett's Berkshire Hathaway Inc
Then that October he learned from Gupta that Goldman would suffer its first quarterly loss as a public company. Rajaratnam sold his entire Goldman stake first thing the next morning, Brodsky said. The loss was not made public until that December.
There's no other rational explanation for the timing of the calls, the timing of the trades, Brodsky said. Those calls say it all.
TOMORROW'S NEWS TODAY
Brodsky also reminded jurors of testimony of witnesses who admitted conspiring with Rajaratnam. These included former McKinsey partner Anil Kumar, former Intel Corp executive Rajiv Goel and former Galleon portfolio manager Adam Smith.
Corrupting his friends and his employees, he gained access to secret information to gain an advantage over ordinary investors in the stock market, Brodsky said. The defendant knew tomorrow's news today, and that meant big money.
To convict, the government must convince jurors beyond a reasonable doubt that Rajaratnam received material non-public information from people who had a duty not to disclose it, and that he knew it was wrong to trade on it.
Kumar, Goel, Smith and former New Castle Funds trader Danielle Chiesi, also featured on key phone taps, are among 19 people to plead guilty, out of 26 charged in the broad Galleon case.
The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
(Reporting by Grant McCool and Jonathan Stempel, editing by Matthew Lewis)
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