The jury in the Rengan Rajaratnam insider-trading case is set to begin debating his fate today, after both sides made their last pitches for support.
U.S. District Judge Naomi Reice Buchwald said yesterday that she’ll instruct the jury before sending them into deliberations today. She also told the panel that they’d have only one thing to talk about: the conspiracy charge that is the only one remaining against the younger brother of Galleon Group founder Raj Rajaratnam.
Buchwald dismissed the two fraud charges against Rengan Rajaratnam last week, but had not notified the jury. She also instructed its members to ignore the evidence of the defendant’s trades in Clearwire Corp., saying they “may not rely upon” it in considering the conspiracy count.
Prosecutors sought to make the most of what was left of their case during closing arguments, asking the jury why Rajaratnam would refer to an alleged source of insider information as a “scumbag” who was “a little bit dirty” if he didn’t know his brother was up to no good.
“That’s not the kind of comment you have when you’re talking to someone about normal business,” Assistant U.S. Attorney Randall Jackson insisted. Prosecutors are seeking to avoid their first courtroom loss in their recent crackdown on insider-trading.
Rajaratnam’s lawyer, Daniel Gitner, told the jury that the government hadn’t proven its case.
“Rengan didn’t know what Raj knew, and the trading records, all the records, undermine the prosecution’s charge,” he said. Those records show that the brothers had divergent views on both companies at issue in the trial.
“I would need really long arms to show you how far apart they were on this,” Gitner said, adding that the prosecution’s case “doesn’t fit together.”
“They can’t finish the puzzle they are so desperate to finish.”
Gitner said that his client was an “emotionally abused younger brother” manipulated by Raj Rajaratnam, who is serving an 11-year prison sentence. Jackson poured scorn on that argument, noting that “the defendant wasn’t a teenager when he showed up at Galleon. He was 38. His brother refused to fire him even though he engaged in tremendous trading losses. I think most of us would pray to have an ‘abusive’ brother like that.”