NEW YORK (Reuters) - The high-profile criminal trial of Galleon hedge fund founder Raj Rajaratnam on charges of insider trading was postponed to March 8 from February 28, a U.S. judge ordered on Thursday.
The written one-sentence order by U.S. District Court Judge Richard Holwell in New York postponing the start of one of the most closely-watched insider trading trials did not provide a reason.
Two people who were briefed on the eight-day postponement said it was for attorney scheduling reasons. A court official in the U.S. District Court said federal prosecutors requested the postponement.
Onetime billionaire Rajaratnam, 53, was arrested and charged with conspiracy and securities fraud in October 2009 in a sprawling case U.S. prosecutors describe as the biggest probe of insider trading in the $1.9 trillion hedge fund industry.
Sri Lankan-born U.S. citizen Rajaratnam, who has pleaded not guilty and is free on bail, has vowed to establish his innocence at a jury trial.
More than two dozen people have been criminally charged in two intertwining networks of hedge fund managers, traders and company executives in the Galleon case.
Nineteen have pleaded guilty and at least 14 have agreed to cooperate with investigators. There could be other cooperators who have not yet been publicly revealed. One defendant is at large.
Since November, prosecutors have announced a widening of the probe of hedge funds to include charges against employees and consultants of so-called expert network firms.
Ellen Davis, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, declined to comment on Rajaratnam’s trial postponement as did Jim McCarthy, a spokesman for the hedge fund manager, who had $7 billion under management at Galleon’s peak. The fund was wound down after the government charged Rajaratnam with using confidential information to gain an unfair advantage in trading of mostly technology company stocks.
When prosecutors announced the case 16 months ago, they highlighted the extensive use of secret recordings of phone calls — tactics normally used to fight organized crime groups, not white-collar offenders. In November, the trial judge denied Rajaratnam’s motion to suppress the wiretap evidence.
The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
Reporting by Grant McCool, editing by Gerald E. McCormick