Hedge fund founder Raj Rajaratnam had foot surgery and did not appear in court on Monday while jurors deliberated for a sixth day in his insider trading trial without reaching a verdict.
Rajaratnam's main lawyer, John Dowd, said in a statement that his client had emergency surgery on Sunday. Presiding U.S. District Judge Richard Holwell approved the Galleon Group founder's absence.
Mr. Rajaratnam had developed a bacterial infection in his foot that required surgery, Dowd said. It is hoped that he will be recovered sufficiently to return to the courthouse this week.
Rajaratnam, who has been free on bail since his October 2009 arrest, had attended every day of the trial that began on March 8 in Manhattan federal court.
The prosecution is the biggest involving alleged insider trading on Wall Street in two decades, the centerpiece of a broad investigation of hedge funds in which dozens have been arrested.
Rajaratnam's absence was unusual but Holwell told the jurors before they left for the day that Rajaratnam couldn't be here and I have excused him for a good reason. That should not enter into your deliberations in any way.
A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment on Rajaratnam's absence.
Defendants may waive certain rights to be present during jury deliberations and when the jury delivers its verdict.
That's why the judge will make very clear what the protocol will be, so no one can object that the defendant did not knowingly and freely agree to it, said C. Evan Stewart, a partner at Zuckerman Spaeder LLP in New York who is not involved in the case.
The jury will resume deliberations on Wednesday. In a note to jurors that was made public, Holwell cited juror scheduling issues for giving the panel Tuesday off.
Prosecutors have accused the Sri Lankan-born Rajaratnam of reaping as much as $63.8 million illegally by trading on inside tips about companies such as chipmaker Advanced Micro Devices Inc and Goldman Sachs Group Inc.
Rajaratnam faces nine counts of securities fraud and five counts of conspiracy. If convicted, he could face up to 25 years in prison.
While the jury continued deliberations, prosecutors and Rajaratnam's lawyers met the judge behind closed doors for more than one hour on Monday. Holwell also received a note from the jury that was not related to evidence. The contents were not made public.
During the trial, prosecutors introduced more than 40 recordings of phone taps that they said showed Rajaratnam receiving and planning trades on inside information. The defense argued his trades were guided by volumes of research and public information, not leaked corporate secrets.
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 case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
(Additional reporting by Andrew Longstreth, editing by Bernard Orr)