Rajaratnam to be heard at next insider trial
Convicted hedge fund tycoon Raj Rajaratnam is being probe for insider trading at hedge funds.
New York: Convicted hedge fund tycoon Raj Rajaratnam is no longer on trial, but his voice is going to be heard again in court on at least one phone tap in the trial of his former employee, Zvi Goffer, potential jurors were told on Monday.
Rajaratnam's name dominated the questioning of scores of New Yorkers who could be among the 12 jurors selected for the five-week-long trial of Goffer and two fellow securities traders. Jury selection will continue on Tuesday followed by opening arguments later Tuesday or Wednesday.
The trials are part of what the government describes as the biggest probe of insider trading at hedge funds on record.
US District Judge Richard Sullivan, two prosecutors and defendants' lawyers worked for more than nine hours on Monday to weed out possible juror bias amid the blaze of publicity surrounding last Wednesday's guilty verdict against Rajaratnam by a jury in the same New York courthouse.
Goffer's lawyer, William Barzee, asked several potential jurors whether his client's one-time employment with Rajaratnam's Galleon Group hedge fund would taint their opinion of him. He also said that the trial would hear an FBI phone tap of Rajaratnam in conversation with Goffer.
"I would try to be very impartial and pure in my assessment," one potential juror, a medical doctor, told the judge, the lawyers and the defendants as they huddled around a conference table adjacent to the courtroom.
Unlike Judge Richard Holwell, who barred reporters from the questioning of potential jurors in March for the Rajaratnam trial, Sullivan granted journalists' request to attend the session.
The secretly recorded phone conversations are the hallmark of the broad Galleon case that ensnared 26 defendants, 21 of whom have pleaded guilty. It was the first time wiretaps had been used so extensively in a white-collar case.
Goffer, 34, his brother Emanuel Goffer, 32, and a third trader, Michael Kimelman, 40, pled not guilty and failed in a bid to suppress the recordings. If convicted on charges of conspiracy and securities fraud, they face a maximum possible sentence of 25 years imprisonment.
The judge excused another potential juror, a marketing consultant who described reading about the Rajaratnam trial and guilty verdict on all 14 counts of conspiracy and securities fraud.
"I know what I read in the other stories and I don't think I can block it from my mind," she said.
In the first round of questioning in open court, the judge polled 45 out of a pool of 100 jurors.
The trial of the three men stems from prosecutions that stunned the lightly regulated, $1.3 trillion hedge-fund world when they were unveiled in late 2009.
Zvi Goffer worked at Galleon between January and August 2008. He then started his own trading firm, called Incremental Capital, with his brother and Kimelman joining him.
The government accuses them of making profitable trades based on inside information about corporate deals obtained from two lawyers who worked at law firm Ropes & Gray LLP.
Prosecutors say Goffer was at the center of a scheme to trade on tips about computer network equipment maker 3Com Corp and Canadian drug company Axcan Pharma Inc.