The evidence shows that an ex-billionaire on trial in the biggest hedge fund insider trading case in history used corrupt, well-connected friends and employees to get secrets and earn tens of millions of dollars illegally, a prosecutor said in his closing argument Wednesday.
"The evidence is now in, and you know the evidence is overwhelming," Assistant U.S. Attorney Reed Brodsky told a federal jury in Manhattan as he summarized seven weeks of testimony.
Authorities have said the defendant, Raj Rajaratnam, earned at least $68 million from illegal tips. Prosecutors played for the jury more than 45 audio recordings on which Rajaratnam could be heard talking with friends about the latest prospects for various stocks.
The closing arguments came in the only trial to have resulted from a three-year investigation targeting inside trading in the hedge fund industry.
The probe has resulted in more than two dozen arrests and 19 guilty pleas from former hedge fund traders and employees of public companies who Brodsky said were corrupted by Rajaratnam's lust for illegal profits. It also has led to a second investigation aimed at consultants in the securities industry who pass off inside information as the product of legitimate research.
Brodsky urged the jury to convict Rajaratnam of conspiracy and securities fraud, saying the government had proven that Rajaratnam became successful with his Galleon Group of hedge funds in part on the backs of ordinary investors in the stock market who did not have the access to secrets about the earnings surprises of public companies and early word of mergers and acquisitions. The Galleon funds shut down after Rajaratnam's October 2009 arrest.
Rajaratnam, born in Sri Lanka and educated at the University of Pennsylvania's prestigious Wharton School, has pleaded not guilty and remains free on $100 million bail. Rajaratnam has maintained that he only traded on information that was already publicly available.
During his closing, Brodsky replayed several audio tapes that he said provided "devastating proof of the defendant's guilt."
The tapes were a highlight of the trial and resulted from what authorities said was the broadest use of wiretaps ever in a prosecution of white collar crimes.
Associated Press writer Larry Neumeister contributed to this report.