Prosecutors and defense lawyers for onetime hedge fund billionaire Raj Rajaratnam will clash in a high-stakes face-off in court on Wednesday when they make their cases to a jury in the biggest Wall Street insider trading case in a generation.
Twelve New York jurors, including a nurse, a graphic artist and a city transportation department employee, were chosen from a pool of about 150 people. The five men and seven women will hear evidence in a case about corporate secrets, wiretaps and cooperating witnesses who are expected to testify about illicit stock tips allegedly fed to the Galleon Group founder.
Rajaratnam, who has vowed to clear his name at trial, sat impassively in Manhattan federal court during jury selection. He has come to court without family or friends, unlike many trial defendants, but he is flanked by a multimillion-dollar defense team of seven lawyers.
Opening statements are set for Wednesday at 2 p.m ET (1900 GMT). A prosecutor will argue to the panel, which also includes six alternate jurors, that Sri Lankan-born Rajaratnam designed a complex web of tipsters who helped him reap $45 million in illegal profit between 2003 and March 2009.
Rajaratnam's defense team will provide some insight into its trial strategy in the face of hundreds of secretly recorded phone calls and several friends who could testify for the prosecution. His lawyers contend that the government has significantly broadened its definition of insider trading.
Jury selection, which began on Tuesday, went relatively quickly for such a high-profile case.
At one point during U.S. District Judge Richard Holwell's questioning of prospective jurors, a 47-year-old woman from the borough of the Bronx said she only watches comedies on TV and Holwell responded, I agree.
One prospective juror said he did not read newspapers because he found them to be depressing.
Everyone in the courtroom laughed when another recounted watching Two and A Half Men, the TV show that fired actor Charlie Sheen after his rants about the show's creator.
Asked what she liked to do in her free time, one said jury duty bringing laughter. She is on the panel.
The case is no laughing matter though for Rajaratnam, who could go to prison for 20 years if convicted of the most serious charge of securities fraud.
Since arresting the 53-year-old U.S. citizen in October 2009 and announcing criminal charges against 26 former traders, executives and lawyers, authorities have pressed ahead with what they call the biggest probe of insider trading in the $1.9 trillion hedge fund industry.
Not since the mid-1980s has a Wall Street insider trading case grabbed such wide public attention. Then, speculator Ivan Boesky, Drexel Burnham Lambert and its junk bond chief, Michael Milken, were prosecution targets.
Nineteen people have pleaded guilty in the Galleon case. It stands apart from past insider trading investigations because of the government's wide-scale use of phone taps. Jurors will hear up to 173 audio recordings during the trial.
The case is USA v Raj Rajaratnam, U.S. District Court for the Southern District of New York, No. 09-01184.
(Additional reporting by Basil Katz, editing by Andrew Marshall, Dave Zimmerman)