Second Galleon Trial Opens Despite Call For Delay

May 16 2011 | 1:54pm ET

Jury selection began today in the second trial stemming from the Galleon Group insider-trading investigation, less than a week after Galleon founder Raj Rajaratnam was convicted for role in the scandal.

Like Rajaratnam, Zvi Goffer, Emanuel Goffer and Michael Kimelman are accused of conspiracy and securities fraud. The three men worked at hedge fund Incremental Capital, founded by Zvi Goffer, a former Galleon trader. Goffer, referred to by prosecutors as "Octopussy," is accused of heading the second of two interlocking insider-trading rings; the other was led by Rajaratnam.

Goffer was a regular attendee at his old boss's trial, which was held in the same courtroom that will be his own.

Friday was not a good one for the three defendants. Emanuel Goffer, Zvi's brother, lost a bid to have the trial delayed for two weeks, owing to the "inflammatory" coverage of Rajaratnam's trial. And Kimelman has been denied the right to present his rejection of a no-jail plea deal as evidence of his innocence.

U.S. District Judge Richard Sullivan called the rejected deal "of little probative value."

As for the prejudicial potential of the Rajaratnam trial, Sullivan said, "the court sees no reason, and Goffer has not offered one, why potential prejudice resulting from a juror's familiarity with Rajaratnam's trial cannot be identified and addressed during jury selection."

There will be a good number of parallels between the Rajaratnam trial and this second trial, most notably the use of wiretaps. Indeed, prosecutor Andrew Fish said he plans to use even more tapes than were played at the Rajaratnam trial, at least 60. And, as in the Rajaratnam trial, the government will in the second trial rely heavily on cooperating witnesses.

Four of the men originally charged alongside the Goffers and Kimelman have pleaded guilty.

One of those four, lawyer Arthur Cutillo, was disbarred on Thursday for his role in the scandal. Cutillo, who worked at law firm Ropes & Gray, which was allegedly the source of much of Goffer's confidential information, pleaded guilty in January.

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