Rajaratnam returns to his trial, nursing right foot

Monday, 9 May 2011 00:00 - - {{hitsCtrl.values.hits}}

Reuters) - Hedge fund founder Raj Rajaratnam, absent for three days from his trial on insider trading charges because of a foot infection, returned to the New York courthouse on Friday wearing a blue vinyl medical shoe.

Rajaratnam, 53, had emergency surgery on Sunday for a bacterial infection on his right foot and received permission from the judge to remain home when the jury deliberated on Monday, Wednesday and Thursday. The jury did not meet Tuesday.

The one-time billionaire limped slightly when he walked into Manhattan federal court with his lawyers.

The jury was sent home for the weekend after a quiet day where they did not make any requests to review evidence, unlike the last two days when it asked to hear replays of wiretaps.

The jurors will resume deliberating on Monday morning.

Rajaratnam is accused of making an illicit $63.8 million between 2003 and March 2009 in trades involving more than a dozen stocks. He is the central figure in what U.S. prosecutors have called the biggest ever probe of insider trading at hedge funds.

Twenty-one out of 26 defendants have pleaded guilty in the case. A hallmark of the investigation was the use of FBI phone taps to secretly monitor his conversations.

The jury began deliberating on 25 April in a locked room adjacent to the courtroom where the high-profile trial has played out since 8 March.

Trial watchers are often on particular alert for potential verdicts on Fridays, speculating that jurors want to finish a case before the weekend. Experts, though, said there is little evidence that more verdicts are announced on Fridays.

“Is that a blip on the radar screen or common? I suspect a blip,” said Neil Vidmar, a professor of law and psychology at Duke University and co-author of the book “American Juries: The Verdict.”

On Wednesday, presiding U.S. District Judge Richard Holwell ordered the jury to begin considering the charges anew when he replaced a sick juror with an alternate.

A verdict essentially hinges on whether the government has convinced jurors beyond a reasonable doubt that Rajaratnam traded on material nonpublic information from people who had a duty not to disclose it, and knew it was wrong.

The defence argues Sri Lankan-born Rajaratnam’s trades were guided by analysis and public information. Dozens of secretly-recorded phone calls of Rajaratnam and several of his associates are at the heart of the prosecution case.

The jurors, including a parks department worker and a computer graphics artist, must wrestle with a 68-page government exhibit list of more than 1,200 documents, a similarly dense, but shorter list of almost 550 defence exhibits, as well as their own notebooks. During deliberations, the jury has asked to re-hear most of the audio recordings.

Galleon managed about $7 billion at its peak. It was wound down after Rajaratnam’s arrest in October 2009 without losses to investors.

The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.