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| Raj Rajaratnam |
A newly empanelled jury heard opening statements yesterday at the blockbuster trial of Galleon Group founder Raj Rajaratnam.
First up was Assistant U.S. Attorney Jonathan Streeter. In harsh language, he told the jury that Rajaratnam had repeatedly engaged in insider trading since 2003. Streeter quoted from one of the hundreds of wiretaps central to his case, in which Rajaratnam is heard telling employees "I heard yesterday from somebody who's on the board of Goldman Sachs that they're going to lose $2 a share." Streeter pointed out that the tip saved Galleon millions of dollars.
"The evidence will show that at Galleon, people did their homework but they cheated, too. At Galleon, people did legitimate research, but they cheated, too, and that cheating is called insider trading. Greed and corruption: That's what this case is all about," Streeter said.
Streeter added that Rajaratnam evidenced a guilty mind when he told his cronies to "trade stocks in a way that would hide" their wrongdoing.
Jurors were then treated to a completely opposite viewpoint from defense attorney John Dowd, who called the prosecution gullible for believing in the self-serving statements of their witnesses.
"The evidence will show the government has it wrong," John Dowd said. "And the government has it wrong because it believed the word of unbelievable people."
Dowd blasted the prosecution’s case and witnesses, even Rajaratnam’s former mistress Danielle Chiesi, who has plead guilty but is not a government witness. He said she was all "talk, gossip and exaggeration" who was trying to "impress others and insinuate herself."
Dowd then painted Rajaratnam as hard-working and honest.
"The information Raj gathered was available to anyone willing to work hard," Dowd claimed. Galleon's team "would analyze a company's published statements and regulatory filings as well as media reports. Talking to corporate executives is what Raj did for a living. It's what investors hired him to do. The evidence will show that Raj did not cheat," Dowd said.
Jurors also heard about a third employee of McKinsey & Co. to be implicated in the case, following after partner Anil Kumar and former chief Rajat Gupta. The unnamed employee was heard on a phone call with Rajaratnam and his brother talking "about plotting to get inside information from a consultant at McKinsey." Rajaratnam described the employee as dirty. Apparently Rajaratnam offered the employee’s wife a job at Galleon.
Today’s first prosecution witness will be FBI Special Agent Diane Wehner.
