Raj Rajaratnam wants jurors at his insider-trading trial told that he was a professional stock analyst who broke no laws by speaking to corporate insiders as he worked to “ferret out” information.
With jury selection three weeks away, John Dowd, the lead defense lawyer for the Galleon Group LLC hedge fund co-founder, gave the judge a proposal for instructing jurors on the law, offering the most detailed insight yet into his defense strategy.
“As the steward of his investors’ money, Mr. Rajaratnam had a fiduciary duty to trade in securities that he thought had attractive investment potential,” Dowd said in a Feb. 2 court filing on the proposed language. “The law permits analysts and investment advisers to speak with corporate insiders” and it’s common “for analysts to ferret out and analyze information.”
Rajaratnam, 53, goes on trial Feb. 28 in Manhattan federal court in what prosecutors said is the biggest U.S. crackdown on insider trading by hedge funds. The Sri Lanka native is accused of making more than $40 million in illegal trades dating back to 2003 at his New York-based fund and faces as many as 20 years in prison if convicted of the most serious charges. He denies wrongdoing.
At least a half-dozen traders are cooperating with the government, and more than 30 people have been accused in alleged conspiracies tied to the case, the first to make extensive use of phone taps to detect Wall Street insider-trading.
Rajaratnam is accused of using secret tips from hedge fund executives, corporate officials and other insiders to trade in more than a dozen stocks, including Intel Corp., International Business Machines Corp., Akamai Technologies Inc., Google Inc. and Advanced Micro Devices Inc.
His defense remains something of a mystery, the government has said. Jessie Erwin, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, declined to comment.
“The defendant has gone to great lengths to keep from the government the witnesses he intends to call and the defense theories he intends to present,” Assistant U.S. Attorney Jonathan Streeter wrote in court papers Jan. 26.
Dowd has chided prosecutors for trying to “smoke out” details before the trial begins.
DEEPAK KUMAR
PGDM 2ND SEM
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