MANHATTAN (CN) – Jurors on Tuesday listened to more than an hour’s worth of government wiretaps meant to prove that Galleon hedge fund co-founder Raj Rajaratnam engineered the largest insider-trading scheme in history.
Twenty people have pleaded guilty to participating in the scheme, though Rajaratnam maintains his innocence.
Prosecutors submitted more than 40 wiretaps into evidence against Rajaratnam, claiming that the recordings prove the billionaire executive gave and received inside tips about major technology companies and banks.
Defense attorneys have contended that the recordings only show “snippets” of “out-of-context” conversations between Rajaratnam and his friends or associates.
During trial, one rule of evidence prohibited playing long stretches of the tape deemed irrelevant, while another mandated that the recordings be submitted in their entirety.
Although the full transcripts have always been available to jurors, deliberations marked the first time many calls have been heard in their entirety, and jurors can listen to the tapes only in open court.
The clips presented at trial show short, crude transactions for information between Rajaratnam and his associates, but the full tapes reveal how Rajaratnam gossips, philosophizes and exchanges routine business ideas with cohorts on the other end of the line.
FBI agents are supposed to “minimize” – or temporarily disconnect – nonpertinent conversation, and transcripts reflect several calls being minimized.
One of those truncated conversations is the June 10, 2008, wiretapped call between Rajaratnam and Anil Kumar, who acted as a cooperating witness for the government.
A former executive for the McKinsey & Co. consulting firm, Kumar testified that Rajaratnam paid him more than $1 million to provide tips about his high-profile clients.
Defense attorney John Dowd repeatedly called Kumar a “liar” and said Rajaratnam hired the executive for legitimate consulting services.
In the second day of deliberations, the jurors requested to hear calls that show Kumar talking to Rajaratnam about “confidential work.” They also capture the men speaking at length about unrelated business and personal matters, reflecting a more human side to the billionaire hedge fund chief.
At one point, Rajaratnam speaks sympathetically about a “lost soul,” but that soul’s identity is unclear before the conversation gets minimized.
The unedited tapes also show irrelevant, but humanizing, details of the hefty Galleon exec ordering a Diet Coke, and the world-traveling Kumar complaining about a lost taxi driver in Japan.
At one point in the lengthy tapes, Kumar states: “[Y]ou’ve got to have the right insights. I mean, that’s all that really matters in the end.”
The statement echoed the defense’s contention that Galleon traded based on careful research and expert analysis, not inside tips.
Jurors also requested to hear a tape in which Rengan Rajaratnam tells his brother Raj, “Scumbag, everyone’s a scumbag,” regarding Kumar and another McKinsey employee whom they are plying for information.
The jurors entered the courtroom to listen to the tapes around noon. They returned to the deliberation room after 1 p.m. for lunch, and still had not reached a verdict by day’s end.