A judge on Friday rejected an indicted securities trader's request to postpone his insider trading trial because of the broadly publicized conviction of hedge fund manager Raj Rajaratnam in the same New York court.
A lawyer's letter on behalf of Emanuel Goffer, 32, one of three defendants going on trial on Monday on criminal charges that are part of the biggest U.S. probe of insider trading at hedge funds on record, asked for a two-week adjournment.
Galleon Group hedge fund founder Rajaratnam, 53, was convicted by a jury on Wednesday of all 14 counts of securities fraud and conspiracy in a two-month-long trial featuring FBI phone taps of him receiving corporate secrets he traded on, making an illicit $63.8 million.
Goffer's older brother, former Galleon trader Zvi Goffer, 34, is the main defendant in the trial starting with jury selection in Manhattan federal court on Monday. It also includes a third trader, Michael Kimelman, 40. All three worked together at Incremental Capital, a firm founded by Zvi Goffer after he left Rajaratnam's employ in August 2008.
Presiding U.S. District Judge Richard Sullivan said in a written order that he rejected Emanuel Goffer's assertion that media reports linking the case to Rajaratnam threatened the defendants' right to a fair trial.
The court sees no reason, and Goffer has not offered one, why potential prejudice resulting from a juror's familiarity with Rajaratnam's trial cannot be identified and addressed during jury selection, the judge wrote.
Secretly recorded phone conversations are the hallmark of the broad Galleon case that ensnared 26 defendants, 21 of whom have pleaded guilty. Rajaratnam and the other trial defendants were arrested within weeks of each other in October and November 2009 amid prosecutorial warnings to Wall Street of a crackdown on insider trading.
Rajaratnam, the central figure in the case and the first to put his fate in the hands of a jury, intends to appeal the sweeping conviction that could put him in prison for between 15-1/2 and 19 -1/2 years.
In another pretrial ruling on Friday, the judge denied a request by Kimelman to tell the jury that he had rejected a government offer to allow him to plead guilty.
Kimelman's rejection of the government's plea deal is of little probative value, Sullivan wrote. He also said that introduction of the issue is likely to confuse the jury.
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 Matthew Lewis)