Cohn Focus of Goldman of lawyer Wrangle at the Rajaratnam trial

April 15, 2011, 7: 11 am EDT by David Glovin, Patricia Hurtado, and Bob Van Voris

Updates with testimony of the expert at paragraph 10).

April 15 (Bloomberg)--Federal prosecutors saying they were prepared to subpoena Goldman Sachs Group Inc. President Gary Cohn to rebut the defence of the Galleon Group LLC, co-founder Raj Rajaratnam in his insider-trading trial.Assistant U.S. Attorney Reed Brodsky said U.S. District Judge Richard Holwell in Manhattan on April 12 that the Government calls Cohn to testify if a witness for the defence, former President of the Galleon United States Richard Schutte, was allowed to talk about jurors Cohn observations during a meeting with Rajaratnam 31 juillet2008. "It is hearsay" and should not be allowed as evidence, Brodsky said the judge, according to a transcript of a Conference of "sidebar" who could not hear the jurors and others in the courtroom. " If the defence witness on the comments of Cohn, Brodsky said, "we are ready to call Mr. Cohn, and we would be allowed to do so in the framework of our rebuttal case".Schutte, who completed his testimony yesterday, was not requested by the lawyers of the Rajaratnam on Cohn comments at the meeting. The attorneys of the Rajaratnam can finish their defense of the billionaire hedge fund manager on April 18. Brodsky said Holwell yesterday that prosecutors had the intention to present a rebuttal folder. He did not mention Cohn or identify other potential witnesses.We have a bit of a rebuttal case, that we are still in preparation, "said Brodsky.Lucas van Praag, a spokesman for Goldman Sachs, has refused to comment on." Ellen Davis, a spokesman for U.S. Attorney Preet Bharara in Manhattan, also refused to comment on.Intel, ClearwireRajaratnam, 53, has been found since March 8 in the largest crackdown initiated of hedge funds in the history of the United States. Sri Lankan born Money Manager is accused of winning $ 63.8 million of Councils disclosed by insiders and traders from hedge funds on a dozen stocks, including Goldman Sachs, Intel Corp., Clearwire Corp. and Akamai Technologies Inc.. He denies wrongdoing, saying: he based his trades on research.Summations in case may begin next week, the judge said.Gregg Jarrell, the top Economist of the U.S. Securities and Exchange Commission from 1984 to 1987, said today as an expert witness to Rajaratnam. Jarrell, who now teaches at the school of commerce in New York at the University of Rochester, said the Councils Rajaratnam would have received were not of galion equipment or do not include inside information.Certainty, UncertaintyJarrell showed jurors graphic displaying news articles and analyst reports on stocks that Rajaratnam is accused of Exchange based on inside information.Cross-examination by Assistant U.S. Attorney Jonathan Streeter, Jarrell testified that mergers and acquisitions are almost always preceded by analysts and journalists speculating on the question of whether the deal will go through.Streeter asked Jarrell if a merchant with access to accurate information from an insider company has an advantage. "If you are sure, in a world of uncertainty, it is an advantage, said Jarrell testimony of Jarrell will continue on April 18 that the discussion on Cohn came April 12 as prosecutors objected to the testimony of Schutte on a meeting that he and Rajaratnam had with Cohn. At the July 31, 2008 meeting, Galleon and Goldman Sachs executives discussed the "potential" that the New York-based investment bank would be "combine with an entity which had a basis large deposit," including a commercial bank or an insurance companySchutte testified.Goldman advised defense offered evidence of Schutte to meet the Government's contention that Rajat Gupta, then member of the Board of Goldman Sachs, tipped Rajaratnam two days before the meeting that the Bank was considering buying American International Group Inc. or Wachovia Corp. testimony of Schutte, the defence may have tried to show that the alleged point of Gupta involves confidential information.Brodsky, objected after the transcript of the Conference of the sidebar with the judge, saying that the defence lawyers wanted to obtain "a hearsay statement that Mr. Cohn made the meeting" words of Goldman Sachs may be "a certain plan." Brodsky said then that the Government could convene Cohn on rebuttal if there was this evidence, according to the transcript.Cross-ExaminationIn end, Schutte was a not testify Cohn comments at the meeting of July 2008. During cross-examination by Brodsky, Schutte said that he did not ask Cohn at the meeting if Goldman Sachs had intended to buy imminent Bank and Cohn did not address the issue.Goldman Sachs Chief Executive Officer Lloyd Blankfein, his testimony at the trial on March 23, said that Gupta has violated the privacy policies of the company by saying allegedly Rajaratnam on its revenues and its strategic plans. Rajaratnam is charged to win one of $ 4.6 million in exchanging advice on investment bank based in New York.Gupta denies wrongdoing and has not been charged criminally. The U.S. Securities and Exchange Commission brought an administrative action against him.The case is U.S. v. Rajaratnam, 1: 09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).

-Editors: Peter Blumberg, Fred Strasser

To contact the reporters on this story: David Glovin Federal Court in Manhattan to glovin@bloomberg.net; Patricia Hurtado in the Federal Court in Manhattan to phurtado@bloomberg.net; Bob Van Voris in Federal Court in Manhattan to the rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha to the mhytha@bloomberg.net

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The defence of Rajaratnam has hard work ahead

By David Glovin, Patricia Hurtado, and Bob Van Voris

With the U.S. Government soon its commercial arguments rest criminal insider against co-founder of Galleon group Raj Rajaratnam, hedge fund Tycoon has a lot of explaining to do. The jury of the Federal Court in Manhattan have spent the last weeks of three-and-half listening to wiretap recordings of telephone conversations involving the 53 years old in what the Government said, it is the largest Fund hedge insider-trading scheme ever prosecuted.

"We know because, uh, one of our guys is member of the Board," Rajaratnam in an appeal recorded by prosecutors on October 7, 2008, on the acquisition of PeopleSupport told his friend Rajiv Goel will be announced at $12.25 per share. In another recorded appeal, Rajaratnam asked his friend Anil Kumar, "Should I buy a million?" after Kumar, then a McKinsey Director General, spoke of a transaction involving Advanced Micro Devices (AMD), a client of McKinsey. "You can't go wrong," said Kumar.

"The wiretap appears devastating," said Stephen Miller, a former Federal Prosecutor who is now a partner with the law firm deceive O'Connor. "And they do not seem to give much room to argue that boards do occur.

The lawyers who defended insider deals with the case say that Rajaratnam must explain its reasons for trades if he hoped for a verdict of acquittal. "Insider-trading charges are among the most difficult to beat, charges," explains Frank Razzano, a partner at Pepper Hamilton in Washington, which won an acquittal for a client in a case of 2005 in Ohio. "The only way to do so is if there is a just as plausible explanation" for why defence stocks were traded.

The defence team tried this approach as Rajaratnam battles accusations, he gets $ 45 million by trading on inside information in more than a dozen stocks over six years. He faces more than 20 years in prison if convicted. In careful cross-examination of the witnesses to the Government including Goel, Kumar and trader from ex-galion Adam Smith - who have all pleaded guilty and seeking leniency in exchange for their testimony - defence lawyer John Dowd and his team sought to prove that the Rajaratnam trades were based on Galleon research or news that are already circulating on the market.

Now, with the Government should rest his case early in the week of April 4, Patricia Pileggi, Schiff Hardin associate in New York, said that Rajaratnam must still explain why he exchanged shares of Goldman Sachs (GS)edge with its enterprise associéRajat Gupta, seated. In an administrative action, the Securities and Exchange Commission accused leaks inside information to Rajaratnam Gupta. Gupta denied wrongdoing.

Best chance to Rajaratnam can support any of the tips he receives were important by themselves in his decision to buy or sell the stock, said Miller. Instead, Rajaratnam can claim that boards were the parts of an included "mosaic" public information and non-public.

Anthony Sabino, a professor at the School of Business at Tobin at the University of Saint John in New York, said prosecutors will likely minimize any claim which Rajaratnam did not know traffic within the information: "they will say, ' you were in charge of a large Fund of couvertureque you didn't really know that you cross the line?" "."

The bottom line: With the wiretap evidence that Rajaratnam obtained advice, his defence shall provide explanations alternate for its trades.

Glovin, Hurtado and Van Voris are journalists for Bloomberg News.

View the original article here

The defence of Rajaratnam has hard work ahead

By David Glovin, Patricia Hurtado, and Bob Van Voris

With the U.S. Government soon its commercial arguments rest criminal insider against co-founder of Galleon group Raj Rajaratnam, hedge fund Tycoon has a lot of explaining to do. The jury of the Federal Court in Manhattan have spent the last weeks of three-and-half listening to wiretap recordings of telephone conversations involving the 53 years old in what the Government said, it is the largest Fund hedge insider-trading scheme ever prosecuted.

"We know because, uh, one of our guys is member of the Board," Rajaratnam in an appeal recorded by prosecutors on October 7, 2008, on the acquisition of PeopleSupport told his friend Rajiv Goel will be announced at $12.25 per share. In another recorded appeal, Rajaratnam asked his friend Anil Kumar, "Should I buy a million?" after Kumar, then a McKinsey Director General, spoke of a transaction involving Advanced Micro Devices (AMD), a client of McKinsey. "You can't go wrong," said Kumar.

"The wiretap appears devastating," said Stephen Miller, a former Federal Prosecutor who is now a partner with the law firm deceive O'Connor. "And they do not seem to give much room to argue that boards do occur.

The lawyers who defended insider deals with the case say that Rajaratnam must explain its reasons for trades if he hoped for a verdict of acquittal. "Insider-trading charges are among the most difficult to beat, charges," explains Frank Razzano, a partner at Pepper Hamilton in Washington, which won an acquittal for a client in a case of 2005 in Ohio. "The only way to do so is if there is a just as plausible explanation" for why defence stocks were traded.

The defence team tried this approach as Rajaratnam battles accusations, he gets $ 45 million by trading on inside information in more than a dozen stocks over six years. He faces more than 20 years in prison if convicted. In careful cross-examination of the witnesses to the Government including Goel, Kumar and trader from ex-galion Adam Smith - who have all pleaded guilty and seeking leniency in exchange for their testimony - defence lawyer John Dowd and his team sought to prove that the Rajaratnam trades were based on Galleon research or news that are already circulating on the market.

Now, with the Government should rest his case early in the week of April 4, Patricia Pileggi, Schiff Hardin associate in New York, said that Rajaratnam must still explain why he exchanged shares of Goldman Sachs (GS)edge with its enterprise associéRajat Gupta, seated. In an administrative action, the Securities and Exchange Commission accused leaks inside information to Rajaratnam Gupta. Gupta denied wrongdoing.

Best chance to Rajaratnam can support any of the tips he receives were important by themselves in his decision to buy or sell the stock, said Miller. Instead, Rajaratnam can claim that boards were the parts of an included "mosaic" public information and non-public.

Anthony Sabino, a professor at the School of Business at Tobin at the University of Saint John in New York, said prosecutors will likely minimize any claim which Rajaratnam did not know traffic within the information: "they will say, ' you were in charge of a large Fund of couvertureque you didn't really know that you cross the line?" "."

The bottom line: With the wiretap evidence that Rajaratnam obtained advice, his defence shall provide explanations alternate for its trades.

Glovin, Hurtado and Van Voris are journalists for Bloomberg News.

View the original article here