The government is trying to block “a key defence expert from giving his analysis of Raj Rajaratnam’s trading,” the WSJ reported.Raj’s defence argues that Galleon, under Raj, used mosaic research comprised of publicly available information to arrive at its decisions about which stocks to trade and when.
His attorneys want to call finance professor Gregg Jarrell to testify, but prosecutors say he should not be allowed.
Jarrell is a professor of finance and economics at Rochester’s Simon School of Business. He was formerly the chief economist of the SEC, and earned an MBA and PhD from the University of Chicago.
According to the WSJ, Jarrell is expected to testify that Raj’s trading was “economically inconsistent with the optimal exploitation of inside information.”
The government disagreed. In a court filing, Jonathan Streeter argued, “contrary to Professor Jarrell’s suggestion, the ‘mosaic theory’ is not a defence to insider trading; at best, it is an academic theory about what constitutes nonpublic, material information.”