At least fifteen high profile executives have already pleaded guilty in the Galleon case, and our understanding of the reach of Rajaratnam’s network continues to grow as more indictments are handed down. Some are already serving jail sentences. Some are cooperating with the prosecution.
The first week of the trial was mostly a matter of picking a jury and hearing opening statements. The jury also heard the first three of the secretly taped phone conversations, which after much debate are indeed being allowed as evidence.
The defense is arguing that Rajaratnam was just doing his job – that it was his job to dig, and research, and he did it exceedingly well. According to NY Times Dealbook, defense attorney Dowd said Rajaratnam “Assembled a mosaic of information and did his own calculations.”
Was it illegal?
Rajaratnam’s defense strikes me a bit like “the dog ate my homework”. Despite the fact that his business was knowledge, he doesn’t claim responsibility for knowing that the information he was assembling included confidential information. Despite the evidence that Rajaratnam paid almost $2 million to one cooperating witness (Anil Kumar) in exchange for confidential information about his McKinsey clients, Rajaratnam appears to claiming that he didn’t know the information was obtained illegally.
Mr. Rajaratnam and his lawyers appear to have a complex plan for the trial, as Rajaratnam did for his business. It also appears that he expects to talk his way out of a guilty sentence, just like he talked his way into (allegedly) making millions trading on insider information.