Legal News

Score One For Raj? Galleon Criminal Trial Set for October

By Amir Efrati

Another day, another development in the Galleon hedge fund insider-trading case.

This time, for a change, it’s good news for the headliner defendant, Galleon founder Raj Rajaratnam (pictured). On Wednesday the federal judge overseeing the criminal case against him scheduled a trial for Oct. 25. Here’s the DJ Newswires story by Chad Bray.

That ruling didn’t sit so well for prosecutors Reed Brodsky and Jonathan Streeter from the U.S. attorney’s office in Manhattan (which has been riding a hot streak lately), who had asked for a June trial date. The prosecutors had argued that Rajaratnam would gain a tactical advantage if the criminal trial occurred after a separate civil-fraud trial that is currently set for August.

Like the prosecutors, Richard J. Holwell, the judge overseeing the criminal case, said he would prefer the criminal trial be heard before the civil trial, which was filed by the Securities and Exchange Commission. But Holwell ruled that given the size of the criminal case, defense counsel should get until the autumn.

Even Rajaratnam’s attorney, John Dowd, said his client would consent to delaying the SEC case, thereby allowing the criminal case to go first.

But Jed Rakoff, the federal judge in Manhattan who is overseeing the civil case, has said the trial date was “firm” and he generally wants cases to be tried quickly.

Criminal- and civil-fraud cases were filed against Rajaratnam and other individuals last fall. Defendants have been dropping like flies in recent months, pleading guilty and agreeing to cooperate with prosecutors against Rajaratnam and others.

Criminal charges have been filed against 21 individuals, including traders and lawyers. Nine have pleaded guilty and eight of those are cooperating with the government.

If convicted of the 13 criminal counts against him, Rajaratnam, 52 years old, faces a maximum of 185 years in prison.

Full post as published by Law Blog - WSJ.com on February 18, 2010 (boomark / email).