Rajaratnam Prosecutors Back Off From Star Witness

Jan 28 2011 | 12:57pm ET

For more than a year, she has been the government's star witness against Galleon Group founder Raj Rajaratnam. But with the guilty pleas and cooperation agreements piling up, prosecutors indicated this week that they might not call Roomy Khan to the stand at all.

In a filing on Wednesday, assistant U.S. Attorney Jonathan Streeter said he might not have Khan testify at Rajaratnam's criminal trial, set to begin one month from today. Khan has been cooperating with the insider-trading investigation of Rajaratnam for years and claims to have passed a series of tips on to her former employer. But Rajaratnam's legal team has already laid the groundwork for an all-out assault on Khan's character and motivations—her guilty plea in the Galleon case is her second conviction for insider-trading.

Streeter aimed to cut Rajaratnam's lawyers off at the pass on that count.

"If the government decides not to call Roomy Khan as a witness at trial, the defendant should be precluded from making the trial about the government's use of Khan as a cooperating witness," he wrote. Streeter also asked U.S. District Judge Richard Holwell to bar Rajaratnam's lawyers from putting "the motivations or conduct of prosecutors or FBI agents in issue" and from other attempts at "jury nullification."

Streeter did say that Rajaratnam was free to call Khan as a witness for the defense, and took the opportunity to blast the defense for failing to turn over documents to the government.

"The defendant has gone to great lengths to keep from the government the witnesses he intends to call and the defense theories he intends to present," Streeter wrote.

The prosecutor also asked Holwell to preclude the defense from mentioning the judge's ruling that the wiretaps at the center of the case were admissible—Holwell called the conduct of prosecutors and the Federal Bureau of Investigation "troubling to say the least" in spite of refusing to throw them out. He also asked that the defense be barred from arguing that the use of wiretaps in an insider-trading case was improper and from mentioning Rajaratnam's possible sentence, which could stretch into the decades if convicted.

Streeter also presented a more positive wish list to the judge. The prosecutor wants to present evidence of how much Rajaratnam made at Galleon as "possible motives for participating in an alleged fraud." Other recent insider-trading trials, including those of former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin and celebrity Martha Stewart, have included such evidence.

Rajaratnam's legal team has its own list of desires, also filed with Holwell this week. The defense wants wiretaps that it deems irrelevant tossed; there are more than 18,000 intercepted conversations. In addition, lawyer John Dowd asked the judge to bar statements from alleged tipsters who did not disclose the source of their allegedly confidential information, as well as evidence about tips which were not traded on.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.