Thursday 25 May 2017

Rajaratnam trial judge edits phone taps labelled too 'blue'

Raj Rajaratnam, the Galleon Group co-founder. Photo: Getty Images
Raj Rajaratnam, the Galleon Group co-founder. Photo: Getty Images

Grant McCool in New York

A judge made the high-profile insider trading trial of Galleon Group hedge fund founder Raj Rajaratnam less risque yesterday, deleting portions of phone taps to be heard by the jury.

Some of the recordings previously played for jurors have been laced with profanity, but both Manhattan federal prosecutors and Mr Rajaratnam's defence lawyers wanted to keep out certain personal conversations involving former trader and Rajaratnam associate Danielle Chiesi and a former marketing executive at Akamai Technologies.

"There may be ways in which we can make them less blue, for want of a better word," prosecutor Jonathan Streeter suggested to US District Judge Richard Holwell before the jury was seated. "Other 'blue' language shows a close relationship."

Mr Rajaratnam is charged with 14 counts of conspiracy and securities fraud, accused of making $45m (€31.6m) in illicit profits between 2003 and March 2009 on leaked stock tips. His lawyers contend that research, analysis and market speculation, not material company secrets, guided his trades.

The trial is in its fifth week. If convicted, Sri Lankan-born Mr Rajaratnam faces as much as 20 years in prison.

One hallmark of the case has been the use of FBI phone taps -- normally reserved for fighting organised crime.

Also yesterday, a US prosecutor said the government would not call a key co-operating witness, former Intel Corp and Galleon employee Roomy Khan, to testify. Mr Khan, who has been associated with Mr Rajaratnam for more than a decade, has pleaded guilty to criminal charges but has not been sentenced.

The court was told phone records, trading records and instant messaging records would be presented as evidence Mr Khan and Mr Rajaratnam conspired to gather earnings and other secrets about Google, Polycom video teleconference technology company and Hilton Hotels. The case continues.

Irish Independent

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