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Rajaratnam's case goes to federal jury

April 25, 2011 at 3:38 PM   |   Comments

NEW YORK, April 25 (UPI) -- Billionaire Raj Rajaratnam's insider-trading case in New York is in the hands of jurors who prosecutors said were instructed by the defense to "forget reality."

Rajaratnam is charged with securities fraud and conspiracy.

"The defense has asked you ignore logic, forget reality and suspend common sense," prosecutor Jonathan Streeter told federal jurors in a rebuttal statement before the judge gave them instructions and sent them off to deliberate, The New York Times reported Monday.

Rajaratnam, the head of hedge fund Galleon Group, has been accused of using insider information to make stock trades that earned him, or prevented him from losing, $50 million. He is at the center of a widely cast net that has included 20 guilty pleas, with charges filed against 26 people.

The case includes some of the country's richest businessmen, including Rajaratnam and Rajat Gupta, who retired as head of consulting company McKinsey & Co. in 2007 but was on the board of directors of Goldman Sachs and Procter & Gamble before the scandal forced him to resign.

Gupta has not been charged with any crime, but the Securities and Exchange Commission initiated a civil complaint against him that could result in fines and having him barred from executive work for a public corporation.

Gupta's attorney, Gary Naftalis, has called the SEC allegations "totally baseless."

The jury in the Rajaratnam case heard wiretapped phone calls in which he said he had "heard yesterday from somebody who's on the board of Goldman Sachs that they are going to lose $2 per share." In a tape of another call, Rajaratnam was heard to say, "I got a call saying something good is going to happen to Goldman," the Times said.

Rajaratnam's lawyers attempted to undermine the government's witnesses, calling one "the biggest liar ever to testify at a trial in the lower Manhattan courthouse," the Times reported.

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