A judge refused to reduce the $100 million bail of Galleon founder Raj Rajaratnam at a district court in Manhattan today.
Judge Theodore Katz did ease Rajaratnam’s travel restrictions to allow him to travel within the US.
“I see no reason to modify the bail since only $2.5 million had been paid in cash,” said Judge Katz.
Rajaratnam has paid the rest of his $100-million dollar bond in securities and property. The defence had requested that the bail be reduced to $25 million.
Rajaratnam, dressed in black, sat impassively and didn’t speak.
The question that Judge Katz posed to both sides was what had changed since the last bail hearing. The defence did not offer a convincing argument. Lead attorney John Dowd painted Rajaratnam as a kindly character who had preserved the Galleon papers and hadn’t frozen his assests after his arrest on Oct. 16.
Dowd also said that Rajaratnam intends to fully pay Galleon’s liabilities. “He doesn’t want anyone to lose a nickel,” said Dowd, and that process would be easier if he had some of that $2.5 million cash in his pocket.
Judge Katz didn’t buy the argument.
The prosecution said that nothing had changed since the previous hearing, except the dissolution of Galleon. Josh Klien, speaking for the government, said that the case against Rajaratnam was strong.
He offered new details. An SEC audit has revealed an IM sent to Rajaratnam: “hold off on PLCM until I get guidance.” PLCM refers to California-based Polycom Inc.
Rajaratnam will be allowed to travel within the US for the purposes of meeting his lawyer in Washington, or to conduct business. But he has to get permission from the government before any trips by submitting his air tickets and contact information.
In an elevator outside the trial room, some in Rajaratnam’s large posse of lawyers were incredulous that the bail reduction didn’t happen. “I can’t believe it didn’t go through,” one said.
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