One of the most titillating parts of the Raj Rajaratnam insider trading trial has been the unrelenting submission of FBI wiretaps into evidence over the last six weeks.
Jurors heard Raj’s younger brother flip out over a Wall Street Journal article; Danielle Chiesi routinely stroking Raj’s ego; and the Galleon founder discussing tips received from a Goldman source, among others.
In their closing arguments, Raj’s lead defence attorney, John Dowd, tried to minimize the content of the wiretaps. He told jurors,
That what they hear on the tapes is nothing more than his client discussing stock outlooks that were widely known among professional traders who pay attention to every scrap of information on the securities they follow.
The defence focused on the intricacies of what constitutes material and immaterial or public and non-public information, and the finer points of when Rajaratnam received guidance from an in-house analyst versus one of the alleged tipsters.
But a veteran white collar lawyer, Ed Novak, told the AP, those details are going to go over the juror’s heads. “They’re going to immediately talk about those tape recordings, and that’s where the case is going to be decided,” he said.
One of the only defenses against the wiretaps is “don’t believe your ears,” said Jonathan New, a former prosecutor now in white-collar defence in New York. “That’s a very hard thing to sell.”
Certainly, it would seem that the most incriminating evidence comes from government wiretaps, because the defence cannot dispute the actual words that came out of their client’s mouth. Which the jurors heard over and over again.