Accused Raj Rajaratnam "Confident" Can Win At Trial

Date: Friday, October 30, 2009
Author: Grant McCool, Post Chronicle

Lawyers for Raj Rajaratnam, the billionaire founder of Galleon hedge fund accused of insider trading, said the U.S. government's case is weak and they were confident of winning any trial, according to a letter filed in court on Thursday.

Rajaratnam's lead lawyer, John Dowd, said the hedge fund manager was being treated worse than epic swindler Bernard Madoff, who was released on $10 million bail last December after his initial confession to a multibillion-dollar fraud.

Dowd asked a Manhattan federal court magistrate judge to reduce his client's bond to $25 million from $100 million and to modify his travel restrictions, arguing he had no incentive to flee because of strong family ties to the United States and $30 million in property.

"The idea that Mr Rajaratnam would simply abandon those properties to avoid a trial that he is confident of winning is neither realistic nor credible," Dowd, a high-profile Washington lawyer, said in a letter to Magistrate Judge Frank Maas.

Sri Lankan-born Rajaratnam, 52, a U.S. citizen, was arrested on October 16 along with five others in what prosecutors described as the biggest hedge fund insider trading case ever. The charges carry a possible prison sentence of up to 10 years.

Thursday's letter said Rajaratnam's lawyers have conferred with the government, "which does not consent to this request." A judge will consider the request and possibly schedule a hearing at a later date.

A spokeswoman for the office of the U.S. Attorney in Manhattan, which brought the criminal charges, declined to comment.

The letter described Rajaratnam as "intensely focused" on Galleon business and "has no intention of abandoning Galleon and its employees." It said that after his arrest, Rajaratnam ordered document preservation at Galleon and "that all shredders be removed from the office."

Galleon liquidated most of its $3.7 billion portfolio last week after investors began demanding their money.