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Monday, June 24, 2024 | Back issues
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Rajaratnam Jury Has to Mine for the Goods

MANHATTAN (CN) - Jurors deciding the inside-trading case of Galleon hedge fund co-founder Raj Rajaratnam have everything but the government's "best evidence" in their deliberation room, prosecutors complained on Wednesday.

For more than seven weeks, prosecutors have presented jurors with three collaborating witnesses and hundreds of documents consisting of trading records, instant messages, illustrations, charts, e-mails and text messages to implicate Rajaratnam in securities fraud.

But the crown jewel of their case has always been the 40-plus wiretaps that capture him giving and receiving alleged inside tips.

More than 20 of the 26 people investigated for the scheme have pleaded guilty to what has been called the largest hedge-fund insider-trading scheme in history.

Rajaratnam, as the alleged ringleader, has avoided conviction for a third day of deliberations.

Defense attorneys have also presented their own witnesses, news articles, analyst reports and even a wiretap asserting that the information was public and the government witnesses were compromised.

The deliberation room showcases every document from the case - except for the binders holding the transcripts of the wiretaps. These sit in front of each chair in the jury box.

To read them, the jurors must request to listen to a particular recording in court, and they may then only use the binders as a guide to follow what they hear.

Jurors have followed this protocol two days in a row, requesting 15 wiretaps in total.

Assistant U.S. Attorney Reed Brodsky complained that it is needlessly difficult.

"All the defense exhibits and government exhibits are there with one exception: ... our best evidence," Brodsky said."

In many tapes, the allegedly incriminating tips are sandwiched between minutes of charming banter and legitimate business discussions. Nonpertinent discussions were not permitted to be played at trial, but a requested tape must now be heard in its entirety.

If jurors had their binders, they could access the notes and scrutinize portions of the transcripts in greater detail, Brodsky said. He added that the defense agreed on the authenticity of the transcripts, but made a "strategic" decision to fight their admission in the jury room.

Defense attorney John Dowd shot back that prosecutors were "try[ing] to change the rules after the horse is in the barn."

U.S. District Judge Richard Holwell agreed that was the only fair procedure because the evidence was "aural." Jurors must rely on what they hear, not what they read.

"The evidence is aural, A-U-R-A-L, and the jurors don't seem hesitant to listen to them," Holwell said.

The hearing revisiting the procedure occurred after the jurors requested six wiretaps of Rajiv Goel, a cooperating witness whose testimony impacts roughly one-fifth of the government's charges against Rajaratnam.

Brodsky suggested putting a computer in the deliberation room for jurors to access files on their own.

Holwell said bringing them into court "prevents the jurors from listening to one line."

Jurors have an enormous case file and almost certainly view the evidence selectively, Brodsky countered. He added that judicial precedence was on the government's side.

Brodsky said that the 2nd Circuit found it appropriate to place a computer in the deliberation room, and another judge in the same courthouse permitted it on Tuesday.

That U.S. district judge is Jed Rakoff, who is presiding over U.S. v. Umeh, a case involving an unprecedented undercover narcotics operation in Liberia. Three floors below the Rajaratnam trial, Umeh is also in deliberations.

Defense attorney John Dowd told reporters that there is, in fact, controversy over the transcripts.

"There are parts of the tapes I've listened to 15 times," Dowd said, adding that Rajaratnam's forensics team listened to the tapes.

Throughout trial, Dowd has disparaged the recordings as "snippets" of conversations taken "out of context."

For now, jurors seem fated to listen to the full tapes.

Deliberations in Rajaratnam continue on Thursday.

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