Tengrinews TV Радио Tengri FM Радио Жұлдыз FM Laws of Kazakhstan
Write us +7 (727) 388 8020 +7 (717) 254 2710
искать через Tengrinews.kz
искать через Google
искать через Yandex
USD / KZT - 333.25
EUR / KZT - 352.95
CNY / KZT - 48.31
RUB / KZT - 5.60

Galleon prosecutors cite 'devastating' evidence

21 april 2011, 16:59
Federal prosecutors cited "devastating" evidence Wednesday against hedge fund tycoon Raj Rajaratnam at the close of the biggest Wall Street insider trading trial for a generation, AFP reports.

In the government's closing statement against Sri Lankan-born Rajaratnam, Assistant US Attorney Reed Brodsky said secret tape recordings of phone conversations involving the Galleon fund founder amounted to "devastating evidence of the defendant's crimes in real time."

His voice rising, Brodsky said Rajaratnam, 53, "committed the crime of insider trading repeatedly" as he strived to conquer New York's dizzyingly lucrative, high-stakes hedge fund market.

In his closing statement, defense attorney John Dowd retorted that the government was distorting facts, coercing witnesses and creating an "imaginary" picture. "You've been badly misled today," Dowd told the jury.

According to Dowd, Rajaratnam did not profit from illegal insider tips on stock movements, but rather used aggressive research to get legitimate, public information from media reports, analysts and trader chatter.

"The government case rests on a fictionalized idea that information can't ever become public until a company issues a press release. In the real world, billions of people are talking," Dowd said.

The seven-week trial is the centerpiece in the most significant insider trading prosecution in years on Wall Street.

But it is also the biggest trial to target Wall Street practices since the 2008 stock market collapse and is seen, in part, as an attempt by the government to satisfy public demand for financiers to be brought to heel.

Illustrating the importance that has been given to the case, the head prosecutor for New York's Southern District, Preet Bharara, spent all of Wednesday observing proceedings from the back row of the packed courtroom.

Targeting major terrorism and mafia suspects, Bharara is one of America's highest-profile prosecutors and the pursuit of Rajaratnam -- using wiretaps and other hard-nosed tactics rarely seen in white collar investigations -- is arguably his biggest case yet.

Dressed in a dark suit and white shirt, Rajaratnam sat almost motionless all day, flanked by two rows of his lawyers. Accused of earning tens of millions of dollars through insider trading, he faces up to 25 years in prison if convicted on all charges.

Everyone agrees that the man known to colleagues simply as Raj built Galleon into a leader of the kind of buccaneering, profit-reaping outfit that serves the highest of high-rollers on Wall Street.

But to prosecutors, he was also the epitome of greed and arrogance who paid and pressured highly placed insiders to give him company earnings, merger plans and other market-moving news ahead of time.

"Corrupting his friends and employees, he gained access to secret information to get an illegal advantage," Brodsky said. "The defendant knew tomorrow's news today and that meant big money."

Using these "corporate spies," prosecutors say, Rajaratnam learned ahead of competitors of data on Google, Intel, Goldman Sachs and other major companies. Armed with these nuggets of information he then bought or sold shares, sometimes earning millions of dollars in a matter of minutes.

According to Brodsky the motive was not just greed, but the kind of lust for power and fame that Wall Street's alpha money managers are famous for.

Dowd, an older, more portly and measured man, spoke softly and with little overt expression. However, his hard-hitting words provided the trial with a dramatic finale.

He said the government skewed Rajaratnam's activities, using "snippets" and a "sliver" of the context to portray legitimate market research as criminal conspiracy.

And Dowd sought to destroy the credibility of key government witnesses -- men who have already pleaded guilty to insider trading with Galleon and who are cooperating with prosecutors as part of a plea bargain in which they hope to receive substantially lower sentences.

Dowd called these key witnesses "biased" and "unbelievable" and said they had been severely pressured to cooperate. "Make no mistake," he told the jury. "You can't believe a word these men said... They lied inside this courtroom. They're getting a free pass from the government on their own crimes.

The prosecution gave the first statement and the defense statement was to continue well into Thursday, followed by a final prosecution rebuttal.

By Sebastian Smith

Add comment
Most Read
Most Discussed