Rajaratnam Hires New Lawyers As Civil Case Gets Fast-Tracked

Oct 28 2009 | 2:02am ET

Signaling his intention to fight the fraud and conspiracy charges against him, Galleon Group founder Raj Rajaratnam has enlisted a top-flight Washington lawyer to defend him.

The billionaire hedge fund manager has hired John Dowd, best known for his investigation of baseball great Pete Rose’s gambling in the late 1980s, and the law firm of Akin Gump to handle the criminal charges against him, his original attorney, Jim Walden, announced.

“Rest assured, his team will not miss a beat and is already well-prepared to help him fight these charges and clear his name,” Walden said.

That could be important, because the civil case against their client seems to be on the fast track.

The federal judge presiding over the Securities and Exchange Commission’s civil case against Rajaratnam said Monday that he wants the trial to begin in little over five months. In a court filing Monday, U.S. District Judge Jed Rakoff, last seen sentencing hedge fund fraudster Marc Dreier to 20 years in prison, ordered both sides to be ready for trial within five months of a Nov. 4 status conference.

Rakoff’s rush could hinder the prosecutors pursuing the criminal case against Rajaratnam, who is accused of participating in a $20 million insider-trading circle, giving his defense attorneys an early look at the government’s case against their client. Given Rajaratnam’s new high-powered lawyers, that could be a big disadvantage for the U.S. attorney’s office. But it is not likely that the case will go forward in April, no matter what Rakoff says.

The SEC generally seeks a stay to postpone its civil cases until after the criminal case has been decided. Even if Rakoff were to deny such a motion—and his filing, which called for the early trial “absent extraordinary circumstances”—the SEC could withdraw its lawsuit and refile it at a time when it wouldn't interfere with the criminal case.

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