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Raj Rajaratnam, the billionaire at the centre of the Galleon Group insider-trading case, has asked the court to unseal records of an earlier criminal charge against the Government’s main witness.
Lawyers for Mr Rajaratnam, the founder of the Galleon hedge fund, hope that the documents will undermine suggestions that the technology investor had been conspiring for years on insider trading with Roomy Khan, prosecutors’ star witness.
Mr Rajaratnam is one of 20 people charged over the past month for their alleged participation in an insider-trading network that prosecutors claim made between $40 million and $53 million in illegal profits.
Ms Khan was also charged and has already pleaded guilty to tipping off several unnamed hedge fund managers with inside information on a number of companies between 2004 and 2007.
In documents filed with the district court in San Jose, California, Mr Rajaratnam’s attorneys said that their client was “completely unaware” until it was reported in the press last month that Ms Khan, a former Galleon employee, had been charged with wire fraud in 2001.
Ms Khan pleaded guilty in a California federal court in 2002 to providing inside information about Intel Corporation, the computer chip maker, to an unnamed accomplice at Galleon.
She was sentenced to home confinement and the records of the case sealed. Her accomplice at Galleon was not charged and has never been identified.
Mr Rajaratnam’s lawyers argued that the documents should be unsealed so that the information can be used in the Galleon founder’s defence. “To ensure that Mr Rajaratnam receives due process throughout the proceedings and a fair trial, it is vitally important that his counsel have access to the records in the case,” the attorneys said in the documents filed in San Jose.
Much of the Government’s case is based on information provided by Ms Khan. Mr Rajaratnam's lawyers are believed to hope to undermine the case against him by raising questions about the credibility of Ms Khan’s testimony.
In a transcript of her guilty plea on the recent charges, the 51-year-old admitted that, despite having agreed to act as a government informant, she destroyed an incriminating e-mail rather than share it with investigators.
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