Business

Galleon prosecutors to rest their case

Federal prosecutors in the closely watched insider-trading trial of Galleon Group founder Raj Rajaratnam are set to rest their case as early as today while a verdict isn’t expected for another two weeks.

FBI agent James Barnacle took the stand today to help connect the dots between the allegations against Rajaratnam and his trading. Barnacle is expected to finish his testimony either today or tomorrow.

Rajaratnam’s defense lawyers are due to start their rebuttal on Monday. His lead lawyer, John Dowd, told the judge yesterday the defense’s case should last about a week.

This morning Judge Richard Holwell denied the prosecution’s request to show videotaped surveillance of former Intel executive, Roomy Khan, allegedly faxing confidential information about Intel to Rajaratnam. As a consequence, the prosecution dropped Mark West, the Intel security worker who was behind the video surveillance of Khan in the late 1990s, from its witness list.

Barnacle told the jury about charts he created for the prosecution linking calls from Rajaratnam’s alleged tipsters to stock trades.

For instance, Barnacle showed calls from ex-Intel exec Rajiv Goel to Rajaratnam on April 16, 2007, were followed by large purchases of Intel shares. Galleon reaped $2.5 million in profits through Intel trades linked to Goel’s alleged tips that month, Barnacle told the jury.

Goel has testified that he called Rajaratnam on April 16, while the hedge fund billionaire was on vacation in the Caribbean, to inform him that Intel’s earnings for the first quarter would be positive rather than negative. He had previously told Rajaratnam they would be negative, causing Rajaratnam to short the stock, prosecutors said.