8:44 p.m. | Updated
In the end, prosecutors said, the most powerful evidence of Raj Rajaratnam’s guilt during his insider trading trial was his own voice.
Though Mr. Rajaratnam sat silently behind the defense table throughout the proceedings, his soft but deep and accented voice resounded through a packed courtroom Wednesday as the government presented its closing argument in the case.
Several of the more than 40 secretly recorded phone conversations between Mr. Rajaratnam and his suspected accomplices formed the centerpiece of the government’s presentation on Wednesday. With those conversations as guideposts, the prosecutors retraced the vast and complicated web of informants and traders, giving jurors a step-by-step outline of their case and the evidence supporting it.
“The tapes provided devastating evidence of the defendant’s crime in real time,” said Reed Brodsky, a prosecutor, standing behind a lectern positioned directly in front of the 12 jurors and four alternates. “These calls have stripped away the veil of legitimacy.”
Mr. Brodsky completed his five-hour closing statement on Wednesday before turning the lectern over to John Dowd, the lead lawyer for Mr. Rajaratnam. Mr. Dowd, who spoke to the jury for only an hour before the day’s session ended, said the tapes were “snippets of recorded conversations taken out of context.”
Azam Ahmed and Guilbert Gates/The New York Times Click on the above graphic to get a visual overview of the Galleon information network.The courtroom was filled to capacity with reporters, lawyers and Mr. Rajaratnam’s supporters, all of whom had come to watch the conclusion of the nearly two-month trial. Mr. Rajaratnam, a co-founder of the Galleon Group hedge fund, is the central figure in a broad government investigation into insider trading at hedge funds. Charged with 14 counts of securities fraud and conspiracy, he stands accused of making $54 million from illicit trades. If convicted, Mr. Rajaratnam faces up to 25 years in prison.
Mr. Dowd is expected to finish his closing statement on Thursday, and after the judge’s instructions the jury will get the case.
The clean-cut Mr. Brodsky, dressed in a dark suit, white shirt and red-white-and-blue striped tie, struck a confident tone during his closing. He shouted, whispered and punctuated his arguments with emphatic gestures. He told the jury that he would not be able to review all the evidence related to Mr. Rajaratnam’s case “or else we’d be here for days.”
Mr. Brodsky said that Mr. Rajaratnam had engaged in “a game to be the best in a highly competitive industry and conquer the stock market at the expense of the law and the average, ordinary investor.”
Repeatedly, Mr. Brodsky appealed to the mostly working-class New York jury by contrasting Mr. Rajaratnam, a billionaire, with the “average, ordinary investor.”
He characterized the defense’s argument that Mr. Rajaratnam traded only on news articles and analyst reports as “absurd” and “ridiculous.” He challenged Mr. Rajaratnam’s defense lawyers to explain away certain incriminating statements made on tape by their client.
A defense witness who testified that all the supposedly illegal tips were already public was mocked by Mr. Brodsky as living in “a theoretical world completely divorced from reality.”
Mr. Brodsky took the jury through five different examples that the government says formed the core of his insider trading conspiracy. One was with Anil Kumar, a former executive at McKinsey & Company, the prestigious consulting firm. The jury heard a tape Wednesday of Mr. Kumar providing Mr. Rajaratnam with confidential information about Advanced Micro Devices, one of his McKinsey clients.
“So yesterday they agreed on, at least they’ve shaken hands,” Mr. Kumar said. “Um, so I think you can now just buy.”
Mr. Dowd, Mr. Rajaratnam’s lawyer, told the jurors that they should not trust Mr. Kumar, who has pleaded guilty to giving Mr. Rajaratnam confidential information on his clients and is cooperating with the government. Mr. Kumar, he said, was “one of the most greedy and corrupt people you will ever meet in your life.”
As it did during the trial, the government also focused on how Mr. Rajaratnam tried to cover up his supposed crimes. Mr. Brodsky took the jurors through a slide presentation titled “The Cover Up,” which ticked off eight ways that Mr. Rajaratnam supposedly tried to cover his tracks.
Mr. Brodsky presented to the jury a conversation during which Mr. Rajaratnam discussed confidential information with another fund manager and then instructed her to “buy and sell, and buy and sell” to create a flurry of trading activity around a particular stock to make it more difficult to detect insider trading.
The government also pre-emptively addressed several of Mr. Rajaratnam’s expected defenses. After taking the jury through a series of trades that Mr. Rajaratnam made in October 2008 based on what Mr. Brodsky said was inside information from Mr. Kumar about Advanced Micro Devices, Mr. Brodsky acknowledged that Mr. Rajaratnam lost money on these tips, despite their accuracy.
“The reason why the defendant lost money is the same reason why millions of investors lost money,” Mr. Brodsky said. “A.M.D. announced the deal at the time of one of greatest financial collapses in American history. You don’t need to make money in order to be guilty of the crime of insider trading.”
For his part, Mr. Dowd focused on the legal definition of insider trading, which involves material non-public information. He argued that Mr. Rajaratnam traded on publicly available data.
In making this argument, he awkwardly echoed the defense lawyer Johnnie Cochran’s famous line during his closing argument in the O.J. Simpson trial.
“If it’s public, you must acquit,” he said.
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