May 25, 2011 – By Grant McCool
Continue Reading Below
NEW YORK (Reuters) - Lawyers for hedge fund tycoon Raj Rajaratnam asked a judge on Wednesday to throw out the Galleon Group founder's conviction on insider trading charges.
In a memorandum to U.S. District Judge Richard Holwell in New York, the lawyers renewed their motion for a judgment of acquittal on all 14 counts of conspiracy and securities fraud.
Rajaratnam had previously requested an acquittal when the government rested its case at trial on April 6, and then again on April 18 after all evidence was presented. The jury rendered its guilty verdicts on May 11, completing a two-month trial.
Holwell had reserved judgment on the April motions.
Sri Lankan-born Rajaratnam, 53, is to be sentenced in July following his conviction in what prosecutors describe as the biggest probe of insider trader at hedge funds on record.
Continue Reading Below
The memorandum said the lawyers were providing the judge with additional information on one conspiracy charge and four securities fraud charges with which Rajaratnam was convicted.
"The government failed to introduce evidence sufficient to permit a reasonable juror to conclude beyond a reasonable doubt that Mr. Rajaratnam committed the crimes charged," it said.
A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment.
The sweeping Galleon case, which ensnared more than two dozen traders, executives and lawyers, marked the first extensive use of secretly recorded phone conversations in an insider trading case.
Such techniques have historically been applied to fighting organized crime families and drug trafficking.
Rajaratnam's main lawyer, John Dowd, said after the jury verdict that he would challenge the case in the 2nd U.S. Circuit Court of Appeals in New York on the grounds that court approvals for FBI phone taps of his client were improperly obtained.
Less than a week after Rajaratnam's conviction, three stock traders went on trial in the same courthouse on the same criminal charges. On Wednesday, a former Galleon trader, Michael Cardillo, testified for the government, which is expected to rest its case this week.
Cardillo, among 22 people who have pleaded guilty, was the fourth trader or lawyer to testify against the former securities traders, who founded their own firm, Incremental Capital LLC in August 2008.
The jury in the trial of traders Zvi Goffer, 34, his brother Emanuel Goffer, 32, and Michael Kimelman, 40, have also heard more than two dozen phone taps.
Zvi Goffer worked for Rajaratnam for about seven months in 2008 but the other two men never traded at the hedge fund, which once had $7 billion under management.
It was wound down without losses to investors after Rajaratnam's October 2009 arrest. The Goffer brothers and Kimelman were arrested less than three weeks later.
The cases are USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184, and USA v Zvi Goffer et al in the same court, No. 10-00056.
(Reporting by Grant McCool; Editing by Gary Hill)