* New York jury to hear closing arguments on Wednesday
* Rajaratnam defense needs to "make sense" of case
* Prosecutors must "focus on what matters" in allegations
By Grant McCool
NEW YORK, April 20 The high-profile insider
trading trial of hedge fund manager Raj Rajaratnam enters its
closing phase on Wednesday and will turn on whether prosecutors
or defense lawyers can summarize their case in a way that most
resonates with jurors.
In six weeks of proceedings, the government played dozens
of secretly recorded phone conversations and called three of
Rajaratnam's former friends to testify that they were part of a
conspiracy to profit from corporate secrets.
In reply, lawyers for Rajaratnam, who faces up to 25 years
in prison if convicted, inundated the jury with graphs, charts
and other documents to underpin their argument that research
and public information guided his trades.
"That is probably leaving them kind of bewildered," said
Eric Fisher, an attorney with law firm Butzel Long and a former
federal prosecutor, who is not involved in the case. "It's
going to be the defense's job to make sense of it in closing."
Galleon Group case graphic r.reuters.com/jyk48r
Rajaratnam ran a tight ship at Galleon [ID:nN11290810]
Prosecution slowly beat same drum [ID:nN06254548]
Q+A-The case against Rajaratnam [ID:nN0798137]
Prosecutors accuse Rajaratnam of making an illicit $63.8
million between 2003 and March 2009 by trading on tips from a
network of highly-placed corporate insiders.
In closing arguments, Assistant U.S. Attorney Reed Brodsky
can be expected to underline the correlation between the tips
"The government wants to simplify it, they want to narrow
it, they want the jury to focus on what matters," said
Professor Bennett Gershman, a former New York state prosecutor
who teaches at Pace University law school.
To convict, the government must convince the jury beyond a
reasonable doubt that Rajaratnam, 53, received material
non-public information from people who had a fiduciary duty not
to disclose it, and that he knew it was wrong to trade on it.
The last phone tap heard by the jury was Rajaratnam
referring to how important timing was. On the Sept. 30, 2008
call between Rajaratnam and former trader and co-conspirator
Danielle Chiesi, the two are heard discussing someone else's
purchase that day of chipmaker Advanced Micro Devices Inc
Chiesi says "that's a very bold move to make unless you
know what we know."
It was a reference to purportedly inside information they
had about AMD's imminent sale of a manufacturing business that
was publicly announced seven days later.
"Look, the other thing is this right, it's been widely
speculated. What people don't know is the time," Rajaratnam was
heard telling Chiesi.
Sri Lankan-born Rajaratnam, a tech stocks researcher who
founded the Galleon Group hedge fund, is charged with 14 counts
of conspiracy and securities fraud in what prosecutors have
described as the biggest probe of insider trading in decades.
In all, 19 out of 26 people charged in the broad Galleon
case have pleaded guilty. Rajaratnam has vowed to clear his
name at trial. A second trial with five defendants is scheduled
to start in the same New York courthouse on May 16.
The case is USA v Raj Rajaratnam et al, U.S. District Court
for the Southern District of New York, No. 09-01184.
(Editing by Steve Orlofsky)