The trial of billionaire Raj Rajaratnam for insider trading really begins today, when the first witness will be called to the stand.
So if you haven’t been following along, don’t worry about it, but start now.
Here are the 10 things you need to know about what’s happened so far:
- The accused: Raj Rajaratnam, billionaire founder of Galleon hedge fund, is 53, lives in New York, and is married with three children. He denies any wrongdoing.
- His company: Galleon was a technology-focused hedge fund that at one point managed over $7 billion. 19 of 26 defendants in the case have already plead guilty, and many of those are former Galleon employees.
- The alleged crimes: Raj is accused of 14 counts of securities fraud through. He allegedly earned $45 million trading stocks in companies including Hilton, Google, Intel and others, based on material, non-public information he garnered through expert network, company employees and other hedge funders.
- The Jury: This is a jury trial which means that the jury is everything. They decide whether or not Raj goes to jail. There are 18 of them, and many of them look a lot like Raj. They were selected from a pool of 300, and whittled down to a final 18 over two days.
- The prosecution says: Raj is greedy, corrupted, and he paid people for inside information on companies so that he could profit off material nonpublic information.
- The defence says: Raj was guilty of nothing but good money management and “shoe-leather” reseach.”
- Raj’s lawyer: John Dowd has previously represented John McCain and Major League Baseball. He’ll argue that was Rajaratnam was merely a type of research known as mosaic, in which analysts gather information about a company from a variety of different public and private sources ‘to calculate the value of security.” He will also attempt to undermine the credibility of the government’s witnesses, like former Galleon and Intel worker Roomy Khan, who has a prior conviction for wire fraud. Click here for more information on Dowd >
- The prosecutors: Jonathan Streeter, Reed Brodsky and Andrew Michaelson. Streeter and Brodsky are assistant U.S. attorneys who have handled previous securities fraud cases. Brodsky prosecuted hedge fund manager Joseph Contorinis in 2010, which resulted in a conviction for insider trading. Michaelson investigated Galleon while working as a lawyer at the SEC, and has now joined the case as an attorney.
- The witnesses: The government will call former employees of Galleon (including Ali Far, Adam Smith and Michael Cardillo), law enforcement sources (such as FBI agents who worked on the case), as well as former colleagues of Rajartnam’s who allegedly provided him with inside information. Some, like former McKinsey employee Anil Kumar, and the three ex-Galleon employees mentioned above, have already plead guilty and are cooperating witnesses. Click here to see the 10 big names that will testify at the Raj trial > The first witness is getting called today and everyone thinks it’ll be Kumar.
- The Judge: Federal Judge Richard J. Holwell has already made a key ruling the case when he denied Rajaratnam’s request to have wiretaps of his conversations thrown out. Holwell previously presided over the Martha Stewart ImCline case and is known for his calm, polite demeanor in the courtroom.
- Companies who have employees involved, or whose stock was traded based on alleged inside information: 3MCorp, Advanced Micro Devices, Akamai Technology, Atheros, Axan Pharma, Goldman Sachs, Google, Hilton, IBM, Intel, Kronos, Marvell, Polycom, Procter and Gamble, Sun Microsystems.
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