Saturday, 13 February 2016
Last updated 12 hours ago
Jul 3 2014 | 7:24am ET
A jury will get to weigh in on the fate of Galleon Group founder Raj Rajaratnam’s younger brother at his insider-trading trial, a judge ruled yesterday.
U.S. District Judge Naomi Reice Buchwald yesterday declined to dismiss the final remaining charge against Rengan Rajaratnam, who is accused of conspiring with his now-imprisoned brother to illegally trade shares of two technology companies. On Tuesday, Buchwald dismissed the two remaining fraud charges against Rajaratnam, leaving only a single count of conspiracy.
But Buchwald made clear she’s not impressed even by what’s left of the government’s case, at one point telling prosecutors that some of their arguments “don’t make any sense at all” and rebuking them at another point when Assistant U.S. Attorney Randall Jackson said he might still focus on an alleged tip about Clearwire Corp. Buchwald was having none of it, having dismissed the Clearwire fraud charges a day earlier.
“I made a ruling on that yesterday,” she said. “What you’re saying is inconsistent with that.”
Instead, she urged prosecutors to focus on showing that the younger Rajaratnam “entered into an agreement with his brother to engage in a conspiracy of insider trading,” rather than “dirt on everyone else,” an apparent reference to the parade of witnesses who have fingered Raj Rajaratnam but who have so far failed to show a direct link to Rengan.
The judge also denied a request from Rajaratnam’s lawyers to bar prosecutors from discussing Clearwire going forward. But even that was a bitter pill for prosecutors: Buchwald told Daniel Gitner that granting his request would actually hurt his case, given her ruling that a jury could not reasonably find that his client had engaged in insider trading.
Rajaratnam, who had faced decades in prison on the fraud charges, now faces a maximum of five years if convicted. The U.S. Attorney’s Office in Manhattan, apparently, is facing the end of its long winning streak in insider-trading cases.