Friday, 30 September 2016
Last updated 1 hour ago
Feb 18 2010 | 2:18am ET
Galleon Group founder Raj Rajaratnam and former New Castle Partners executive Danielle Chiesi will go on trial for insider trading in October, the judge in the case ruled.
The criminal trial will begin on Oct. 25, despite the prosecution’s bid to have it begin in June or July, in advance of a civil trial stemming from the Securities and Exchange Commission’s lawsuit against the two. U.S. District Judge Richard Holwell sided with the defense’s argument that a summer trial would leave them ill-prepared.
“It’s an enormous job,” Rajaratnam’s lawyer, John Dowd, told the judge. “Six months is just ludicrous to try to defend a case of this enormity.”
Alan Kaufman, a lawyer for Chiesi, called the prosecution’s proposed timeline “a physical impossibility.” Kaufman suggested a January trial date.
But Holwell also agreed with the prosecution’s argument that the criminal trial should be held first; lawyers for Rajaratnam and Chiesi said they would ask U.S. District Judge Jed Rakoff, who is overseeing the civil trial, to postpone it.
“This is clearly the most important case,” Dowd said. “The other case is, frankly, a nuisance.”
The SEC trial is set to begin on Aug. 6. It is unclear that Rakoff can be swayed; he has previously made clear that it is a “firm” start date for the trial. Rakoff will hold a hearing on Feb. 19.
Also at yesterday’s hearing, Rajaratnam and Chiesi pleaded not guilty to a new indictment against them adding new charges against the former and new allegations against the latter. Both had previously pleaded not guilty to the original indictment.
If convicted, Rajaratnam faces up to 185 years in prison, and Chiesi 155 years.