After six weeks, testimony has concluded in the landmark insider trading trial of Galleon Group co-founder Raj Rajaratnam. Now, it will be up to attorneys for Rajaratnam and the government to persuade the jury in closing arguments, which are set to begin Wednesday.
Rajaratnam's attorneys rested their case Monday, without calling him to testify in his own defense. The defense called just five witnesses over six days, in contrast to the prosecution, which called 18 witnesses over five weeks.
Prosecutors then wrapped up their case with a flourish, using FBI Special Agent James Barnacle as a rebuttal witness to introduce one last wiretapped phone call. The wiretaps, some 40 in all, have been at the heart of the government's case, and the last one was meant to counter the defense contention that Rajaratnam traded only on information that was already in the market.
In the conversation, recorded September 30, 2008, Rajaratnam and hedge fund consultant Danielle Chiesi are heard discussing a tip that Advanced Micro Devices was planning to spin off much of its semiconductor manufacturing operations to an Abu Dhabi investment fund. The two had been quietly buying up the stock, but that day someone placed an order to buy one million shares just as the market was closing. The two try to figure out who is behind the order.
"Do you think somebody knows what we know?" Chiesi asks. "I think it's hard to believe."
Rajaratnam agrees the order probably just came from a market maker in the stock, not someone with inside knowledge of the upcoming deal.
"It's been widely speculated," Rajaratnam says about the AMD transaction. "What people don't know is the time."
Rajaratnam, a one-time billionaire who co-founded the Galleon Group, faces 14 counts including conspiracy and securities fraud, in an alleged inside trading scheme that prosecutors say netted him as much as $63 million. The defense claims Rajaratnam actually lost $67 million on AMD trades alone.
Unlike most white collar cases in which defense attorneys seek to humanize and endear their client to the jury, Rajaratnam was barely a presence in the case. Not only did he not testify in his own defense, he sat away from the defense table throughout the trial, out of the view of some of the jurors.
Only once during the defense case was the jury exposed to the personal side of the 53-year-old hedge fund mogul. Jeffrey Canada of the Harlem Children's Zone — who was featured in the award-winning documentary "Waiting for Superman," took the stand for approximately ten minutes to testify about Rajaratnam's generosity.
After taking Tuesday off for the Passover holiday, closing arguments are set to begin on Wednesday, with the jury expected to begin deliberations as soon as Thursday afternoon.
Assistant United States Attorney Reed Brodsky will deliver the closing arguments for the government. Lead defense attorney John Dowd will sum up the case for the defense.
One juror, a Metropolitan Transit Authority worker, was excused from the case on Monday due to illness. He was replaced by a female alternate juror, which means the jury deciding the case will be made up of three men and nine women.
If convicted, Rajaratnam could face 20 years in prison.
-Additional reporting by Laura Kurinsky