Insider trial jurors asked about Rajaratnam, bias

By @ibtimes on

In a trial of three New York securities traders on insider trading charges, several jurors told the judge on Tuesday they could consider the case separately and impartially from last week's conviction of high-profile Galleon Group hedge fund founder Raj Rajaratnam.

Some of the potential jurors, however, were excused for possible bias from sitting for the Manhattan federal court trial of a former Rajaratnam employee, Zvi Goffer, and two other men who have had no association with Galleon.

U.S. District Judge Richard Sullivan struck them from service on the panel after they said they could not set aside preconceived notions from reading about hedge fund tycoon Rajaratnam.

The two-day jury selection was completed on Tuesday. The panel of 12 and three alternates includes a medical doctor, an acting school administrator and a counselor to victims of crimes.

Sullivan said opening arguments would start on Wednesday with the government's presentation followed by remarks from a lawyer for each of the three defendants.

The Goffer trial comes after last Wednesday's jury verdict convicting Rajaratnam on all 14 counts of insider trading conspiracy and securities fraud with which he was charged.

The two trials are part of what the government describes as the biggest probe of insider trading at hedge funds on record.

Many of the potential jurors indicated under questioning that they could be impartial and fair to the three defendants, despite knowledge of the two month-long Rajaratnam trial.

One told the judge that even though he had read newspaper articles on the Rajaratnam verdict, I think I can forget the slant that was published.

Another said: I presume them to be innocent referring to Zvi Goffer, 34, his brother Emanuel Goffer, 32 and David Kimelman, 40. Their trial is expected to last five weeks.

These cases have the same conclusions, one of the potential jurors said during questioning by the judge with the defendants, their lawyers, prosecutors and reporters present. He was excused from serving on the jury.

It's a slight question, guilt by association, said the man, who described his career working for the likes of Credit Suisse, Lehman Brothers and Morgan Stanley.

The three defendants sat quietly in chairs behind their lawyers during the questioning of potential jurors. At times they conferred with the lawyers or handed them scribbled notes.

Potential jurors were told on Monday that if selected to the panel, they would hear an FBI phone tap of Rajaratnam in conversation with Goffer. The government pinned its case against Rajaratnam on 46 phone taps played at trial.

The secretly recorded phone conversations are the hallmark of the broad Galleon case that ensnared 26 defendants, 21 of whom have pleaded guilty. It was the first time wiretaps had been used so extensively in a white-collar case.

Zvi Goffer worked at Galleon between January and August 2008. He then started his own trading firm, called Incremental Capital, with his brother and Kimelman joining him.

The government accuses them of making profitable trades based on inside information about corporate deals obtained from two lawyers who worked at law firm Ropes & Gray LLP.

The case is USA v Zvi Goffer et al, U.S. District Court for the Southern District of New York, No. 10-00056.

(Reporting by Grant McCool; Editing by Tim Dobbyn)

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