Wall Street's biggest insider trading trial begins

The much-awaited trial of Raj Rajaratnam, founder of erstwhile Galleon Group, who has been indicted by Federal authorities in the biggest insider trading case on the Wall Street, began on Tuesday in Manhattan Federal Court.

Although the first day's proceedings at the court involved only the jury selection, both the chief prosecutor Preet Bharara and Rajaratnam's lead defense counsel John Dowd are expected to make opening statements as early as Wednesday itself.

A total of 12 jurors besides six alternates were selected by Judge Richard J Holwell, out of 100-odd prospective jurors for the criminal trial.

The prospective jurors sat in a large room on the 26th floor listening to the judge's questions to each of them including whether any of them knew about Rajaratnam or his company or read about them in newspapers as also their feelings, if any, concerning the industry as well as their views on Wall Street.

"We are here to try a criminal case. Once the jury is selected, we will examine documents and evidences. The purpose why I am asking these questions is to select a fair and impartial jury," the judge said at the outset. During the course of the day over a dozen potential jurors were dismissed on various grounds.

Holwell said it may take eight to ten weeks for the trial to conclude. The judge also said that the names of individuals like Rajeev Goel, former managing director in Intel's Treasury Group, who pleased guilty last year to securities fraud charges as well as Roomy Khan an ex-Intel and galleon employee who also pleaded guilty to insider trading charges and Rajat Gupta, former Goldman Sachs director who was charged by the Securities and Exchange Commission last week in a civil complaint with insider trading, may come up during the trial of the case and asked the jurors if anyone has connection with either them or their companies.

The judge read out the names of about 100 individuals and over three dozen companies. A total of 19 people have so far pleaded guilty in the Galleon insider trading case.

Throughout the 6-hour long process of jury selection, Rajaratnam, 53, dressed in a jacket, blue tie and white shirt, patiently sat in the courtroom along with his seven-member team of attorneys led by Dowd. He was occasionally seen whispering with his attorneys, but hardly ever looked at the jurors.

Braving cold dozens of TV reporters and cameraman had been waiting since morning outside the Daniel Patrick Moynihan Court House where US District judge was to preside over the trial later in the day to get a few shots, and if possible some comments, from the flamboyant Sri Lankan ex-billionaire.

But not very many people got lucky with taking shots as he entered the courthouse from the Worth Street Side and not from the main entrance at 500 Pearl Street where most of the photographers and reporters were waiting expecting him to arrive.

For the rest of the day TV and camera crew parked themselves on the Worth Street entrance to make sure Rajaratnam does not give them a slip while coming out of the court house.

Some news organizations posted two photographers one each on each of the two entrances. In the afternoon all the cameramen present were able to take shots before he got on to his chauffer-driven SUV. He did not make any comment either in the morning or in the afternoon although he looked cheerful.

Rajaratnam, who has vowed to fight the case and has pleaded not guilty, was arrested and charged with making an estimated $45 million through illegal trading helped by information from insiders in different companies in October 2009. He, however, is free on bail.

That his case has generated a lot of interest among people was evident. On a 17th floor room, where some of the reporters had been sent because the 26th floor room was packed to capacity, this correspondent noticed that several of those present had neither any note book nor pencil, nor were they taking any notes.

They were sitting with eyes fixed on the TV and were occasionally making comments. "No. I am not a journalist, neither an attorney. You can say I am just a concerned citizen," one of them said.

Although it was just the first day of the trial, it was not exactly a 'media circus' as some newspapers had predicted it would be.

"The Rajaratnam trial may be the most far-reaching financial trial on Wall Street in years. Still, he's got nothing on Martha Stewart (who was tried in the same court in 2004 obstructing a government investigation into her stock trades) when it comes to media star power," according to a report by Bloomberg News.

"In that trial, dozens of journalists filled three rows of courtroom benches on an almost daily basis. That throng included celebrity reporters such as Dominick Dunne, who was writing for Vanity Fair. Stewart was greeted outside the courthouse on Day 1 of her trial by about 100 photographers. Her supporters held placards high."