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Prosecution rests in Rajaratnam trial

Last Updated 03 May 2018, 06:39 IST

The defense, which is expected to start presenting next week, will try to establish that Rajaratnam's trade was based on research, knowledge of the market, and information already available in the public domain.

The government's last witness, James Barnacle Jr - an FBI agent, testified that Sri Lanka-born Rajaratnam had made more USD 63 million from confidential information he received from insiders.

Barnacle explained that the main accused had made USD 53.8 in profits and avoided losses worth USD 9.9 million. Earlier, the prosecution had indicated that one-time billionaire had made USD 45 million from insider tips.

Since the start of the trial, Rajaratnam has sat with his team of lawyers, and appears to be listening to the evidence and arguments attentively. The government has played for the jury secretly recorded phone conversations between Rajaratnam and other alleged conspirators who provided him with confidential information.

Out of 26 people arrested in the case, 19 have pleaded guilty. Rajaratnam, who is charged with 14 counts of conspiracy and securities fraud, denies wrongdoing. If found guilty, he faces up to 20 years in prison.

The case also involves three Indian-Americans. Rajaratnam's old classmates from The Wharton School of the University of Pennsylvania — Anil Kumar, a former McKinsey and Co director and Rajiv Goel, a former Intel Corp executive — pleaded guilty and testified against him.

Kumar testified against him on one of the biggest deals in the case - 2006 acquisition of ATI Technologies, a graphic design company, by Advanced Micro Devices, a microchip- processing company, which allegedly led to profits of more than USD 20 million.

Goel, who described Rajaratnam as "a good pal," testified that he spilled the beans on Intel's plan to invest USD 1 billion in a new joint venture between Clearwire Corp and Sprint Corp.

At the start of the trial, Assistant US Attorney Jonathan Streeter said that Rajaratnam "knew tomorrow's business news today and traded on it."

The government also called the head of Goldman Sachs, Lloyd Blankfein, as a witness in connection with Rajiv Gupta, a former director at the investment bank, who is also accused of passing insider tips to Rajaratnam on the possibility of the investment bank buying Wachovia or the American International Group.

Gupta, who faces civil charges, is also accused by the Securities and Exchange Commission of tipping off Rajaratnam about Warren Buffett's USD 5 billion investment in the bank during the financial crisis. Yesterday, Rajaratnam's lawyers also asked Judge Richard Holwell to acquit him.

It was not clear yet whether the defense intends to put Rajaratnam on the stand to testify during the trial.

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(Published 07 April 2011, 02:16 IST)

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