Rajaratnam returns to his trial, nursing right foot

By Grant McCool and Basil Katz

NEW YORK (Reuters) - Hedge fund founder Raj Rajaratnam, absent for three days from his trial on insider trading charges because of a foot infection, returned to the New York courthouse on Friday wearing a blue vinyl medical shoe.

Rajaratnam, 53, had emergency surgery on Sunday for a bacterial infection on his right foot and received permission from the judge to remain home when the jury deliberated on Monday, Wednesday and Thursday.

One-time billionaire Rajaratnam is accused of making an illicit $63.8 million between 2003 and March 2009 in more than a dozen stocks. He is the central figure in what U.S. prosecutors have called the biggest probe of insider trading at hedge funds on record. Twenty-one out of 26 defendants have pleaded guilty.

If convicted, Rajaratnam faces up to 25 years in prison on conspiracy and securities fraud charges.

Galleon Group founder Rajaratnam walked with a slight limp as he arrived on the 17th floor of the Manhattan federal court building with his lawyers. He was wearing a thick blue vinyl medical shoe on his right foot.

The 12 jurors began deliberating the evidence on April 25. On Wednesday, presiding U.S. District Judge Richard Holwell ordered the jury to begin considering the charges anew when he replaced a sick juror with an alternate who was present to hear seven weeks of evidence.


A verdict essentially hinges on whether the government has convinced jurors beyond a reasonable doubt that Rajaratnam traded on material nonpublic information from people who had a duty not to disclose it, and knew it was wrong.

The defense argues Sri Lankan-born Rajaratnam's trades were guided by analysis and public information. Dozens of secretly-recorded phone calls of Rajaratnam and several of his associates are at the heart of the prosecution case.

The jurors, whose occupations range from parks worker to computer graphics, must wrestle with a 68-page government exhibit list of more than 1,200 documents, a similarly dense, but shorter list of almost 550 defense exhibits, as well as their own notebooks. During deliberations so far, the jury has asked to re-hear most of the audio recordings.

Galleon managed about $7 billion at its peak. It was wound down after Rajaratnam's arrest in October 2009 without losses to investors.

The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.

(Reporting by Grant McCool, editing by Dave Zimmerman)