The lawyer for Galleon Group co-founder Raj Rajaratnam has accused US prosecutors of living in a “make-believe” and “imaginary world” where publicly available information about pending deals “didn’t exist.”
John Dowd, in the second day of closing arguments at Rajaratnam’s insider-trading trial, yesterday took jurors in Manhattan federal court through weeks of evidence to show that his client wasn’t guilty of conspiracy or securities fraud. His recurring theme was that information the government claimed was secret was actually public knowledge.
“It was public,” Dowd said repeatedly through an almost 5 1/2-hour summation. “You must acquit.”
Dowd said Rajaratnam traded on information about a pending takeover of ATI Technologies by Advanced Micro Devices because Hector Ruiz, the chief executive officer of AMD at the time, had told Wall Street analysts about it. Prosecutors say Rajaratnam was tipped by Anil Kumar, a former partner at McKinsey & Co, where Sunnyvale, California- based AMD was a client.
“Word had gotten around,” Dowd said. “Hector was talking about it.”
Dowd’s summation came in the seventh week of a trial that might send Rajaratnam, 53, to prison for 20 years in the biggest US crackdown on insider trading at hedge funds. Rajaratnam is accused of gaining $63.8 million from tips leaked by corporate insiders and hedge-fund traders about a dozen stocks, including Goldman Sachs Group Inc, Intel Corp, Clearwire Corp and Akamai Technologies Inc.
Early on, he attacked the government’s claim that wiretaps of conversations between Kumar and Rajaratnam showed Kumar tipping Rajaratnam about upcoming job cuts at EBay Inc. Dowd said the news had been widely reported before that in the media.