What Attorneys Didn't Say in Rajaratnam Opening Statements

At least as noteworthy as what attorneys did say in two-and-a-half hours of opening statements in the Raj Rajaratnam insider trading trial is what they did not say.

Raj Rajaratnam co-founder of the Galleon Group hedge fund.
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Raj Rajaratnam co-founder of the Galleon Group hedge fund.

Assistant United States Attorney Jonathan Streeter carefully laid out the government's case against Rajaratnam, promising to play dozens of secretly recorded phone conversations and laying out a long list of witnesses who will testify.

But Streeter did not include Goldman Sachs CEO Lloyd Blankfein or CFO David Viniar. Both appeared on a list of witnesses read to prospective jurors, and there were reports Blankfein at least had agreed to testify for the government. Prosecutors — or defense attorneys for that matter — could decide later to call them to testify, but neither side chose to highlight that as they laid out their cases.

The Goldman Sachs executives might be able to bolster the government's charge that Rajaratnam traded on inside information about key developments at Goldman during the financial crisis in 2008.

The tips allegedly came from Rajaratnam's close friend and former Goldman board member Rajat Gupta. But Gupta is also unlikely to testify in the case, especially after the Securities and Exchange Commission cited him in an administrative complaint for insider trading, which Gupta's attorney calls baseless.

Streeter also revealed that the government does not have any recordings of Rajaratnam's phone conversations with Gupta. Streeter explained to jurors that not all of Rajaratnam's phone conversations are recorded, because investigators only had court approval to wiretap one of Rajaratnam's phones. But the prosecutor promised to play recordings of Rajaratnam talking with others about his conversations with Gupta.

On the defense side, lead attorney John Dowd promised to show Rajaratnam is honest, loyal and "generous to a fault." Dowd said his client traded legally, based on "expert research." What he did not say was whether Rajaratnam would testify in his own defense, which Rajaratnam has reportedly told friends he wants to do.

Rajaratnam is under no obligation to testify, and jurors will likely be told as much. Plus, it is a risky strategy, and a decision many defense attorneys wait to make until after the government has presented his case.

But the fact that Dowd did not raise the possibility in his opening statement means that even if Rajaratnam does plan to testify, Dowd is holding that card close to the vest.