Shortly after Raj Rajaratnam’s arrest on Oct. 16, 2009, his brother Rengan went into the Galleon Group LLC co-founder’s office and took his sibling’s notebooks, former Galleon trader Adam Smith told prosecutors, according to a court filing made Sunday.
Raj Rajaratnam’s lawyers on Sunday asked a judge to bar Smith from testifying about Rengan Rajaratnam’s actions on Oct. 16.
Prosecutors are hoping to offer the account from Smith, who will testify for the government today, “to prove the existence” of a conspiracy and “Rengan’s membership in it,” they wrote.
U.S. District Judge Richard Holwell said Monday that he was “leaning” toward barring the testimony and will decide before Smith takes the witness stand.
In other court papers filed Sunday in Manhattan federal court, where Raj Rajaratnam is on trial for insider trading, prosecutors also said they want Smith to testify about comments Rengan allegedly made to him months after Raj’s arrest. Holwell said he is weighing the request.
“Rengan told Smith that when someone discussed ‘Kamal’ with Raj, Raj would say it was a reference to Kamal Das, a sell-side analyst (and not Kamal Ahmed, a Morgan Stanley investment banker whom the government intends to prove provided inside information to Smith, which Smith in turn provided to Raj),” Assistant U.S. Attorneys Jonathan Streeter and Reed Brodsky wrote in their filing.
Raj Rajaratnam, 53, is the central figure in the largest crackdown on hedge-fund insider trading in U.S. history.
