The epic battle that’s about to take place in the courtroom over Raj Rajaratnam’s alleged insider trading will depend entirely on the arguments made in court.And what the judge and jury decides could be affected by what they hear as much as what they don’t hear.
What they don’t want the jury to know
Both sides have already started making demands about what the opposition shouldn’t be allowed to show the jury. The issues up for debate are, for example:
defence: wants to block prosecutors from using it against him.
Prosecutors argue: it’s relevant because it links Raj’s financial compensation to his possible motives
How it could affect the case: jurors might also see Raj’s wealth as a lack of motive – that he didn’t need to illegally inside trade.
The government’s motives for trying the caseProsecutors: want to block Rajaratnam from challenging U.S. motives for prosecuting him.
defence: wants to make the point that a lot is riding on this case for the U.S. government. Raj is the government’s most high profile defendant yet. And the feds hope he’s the first of many Wall Streeters they send to jail. So winning this case is very important to them, and the defence might suggest that the end goal is clouding the fed’s judgement of Raj’s guilt.
What’s in some wiretaps, IE: Statements Raj heard from tippers who didn’t say where they got the information from; “General and non-specific” info Raj heard from tippers; Evidence that didn’t lead to a trade
defence: basically, they want to block prosecutors from using as many wiretaps as possible. Those listed above might be considered irrelevant, if the judge agrees.
Prosecutors: it’s probably safe to assume that the conversations the prosecution wants to use either contain evidence of insider trading or are character-destroying
Raj’s trading in four (unknown) companies
defence: wants the prosecution to be blocked from mentioning Raj’s trades in four companies that it listed as evidence recently.
Prosecution: wants to use Raj’s trades anyway.
How long Raj could spend in jail
Prosecution: wants to block the defence from telling jurors about Rajaratnam’s potential sentence if convicted
defence argues: if Raj is convicted on all charges, he faces a whopping 185 years! Of course, that’s only if he serves consecutively. Experts predict that Raj will spend about 12 years in jail if he’s convicted. He faces up to 20.
What Holwell said in his earlier ruling admitting wiretaps into the trial
Prosecution: wants to block the defence from mentioning presiding Judge Holwell’s statement that the prosecution, when it obtained a search warrant required for the wiretaps, had made a “glaring omission” in its application.
defence: Holwell admitted the wiretaps despite the “glaring omission,” so the defence wants the court to hear Holwell’s statement
The argument that it was improper for prosecutors to use wiretaps to investigate insider trading
Prosecution: wants to block the defence from using this argument
defence: disagrees, obviously.
What they want the jury to know
Now here’s how the defence wants the jury’s instructions to read, more or less:
Rajaratnam was merely a stock analyst doing his job when he spoke to corporate insiders. Don’t convict him if his alleged tipsters merely claimed to have material inside information, or if Rajaratnam thought their information wasn’t material or nonpublic.
Rajaratnam did not break the law unless the person passing on the information had a confidential relationship with a company, violated it and “personally benefited in some way” from doing so.
And here’s what the prosecution wants the instructions to say:
Insider trading hurts “the investing public.”
Congress recognised that the purchase of a stock is different from the purchase of a vegetable bought in a grocery store.