5155 14K8RAJ1 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT of NEW YORK 2 ------X 2 3 UNITED STATES of AMERICA, 3 4 V
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5155 14K8RAJ1 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 UNITED STATES OF AMERICA, 3 4 v. 09 CR 1184 (RJH) 4 5 RAJ RAJARATNAM, 5 6 Defendant. 6 7 ------------------------------x 7 8 New York, N.Y. 8 April 20, 2011 9 9:35 a.m. 9 10 10 Before: 11 11 HON. RICHARD J. HOLWELL 12 12 District Judge 13 13 14 APPEARANCES 14 15 PREET BHARARA 15 United States Attorney for the 16 Southern District of New York 16 JONATHAN R. STREETER 17 REED M. BRODSKY 17 ANDREW MICHAELSON 18 Assistant United States Attorneys 18 19 AKIN GUMP STRAUSS HAUER & FELD LLP 19 Attorneys for Defendant 20 JOHN M. DOWD 20 TERENCE J. LYNAM 21 MICHAEL STARR 22 22 ALSO PRESENT: B.J. KANG, FBI 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5156 14K8RAJ1 Summation - Mr. Brodsky 1 (Trial resumed; jury present) 2 THE COURT: Good morning, ladies and gentlemen. 3 We are going to have three closing arguments. First 4 the government, Mr. Brodsky, will start and give a closing 5 argument on behalf of the government. Then Mr. Dowd will 6 present the closing argument on behalf of defendant. And then 7 Mr. Streeter for the government will have an opportunity to 8 make a rebuttal argument. So we will have three arguments all 9 together. And we will go into tomorrow probably for these 10 arguments. It will take some time because it has been a long 11 case. 12 We will start with Mr. Brodsky. 13 MR. BRODSKY: Thank you, your Honor. 14 Corrupting his friends and employees to gain access to 15 secret information to get an illegal advantage over ordinary 16 investors in the stock mark market, because of money, pressure, 17 and to use the defendant's own words, "I wanted the recorded 18 conversations because of a conquest." That's what the evidence 19 showed. That's what the defendant did. 20 Members of the jury, when this trial began, we told 21 you the evidence would prove beyond a reasonable doubt that the 22 defendant used stolen business information to make tens of 23 millions of dollars in illegal profits, and that the defendant 24 corrupted well connected friends and employees to get access to 25 secret information, and that the defendant illegally traded, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5157 14K8RAJ1 Summation - Mr. Brodsky 1 based on that secret information, in order to make money. 2 The evidence is now in and you know the evidence 3 overwhelmingly demonstrated beyond a reasonable doubt that the 4 defendant intentionally, knowingly and repeatedly conspired 5 with others to get nonpublic information from insiders at 6 public companies and then traded based on that secret 7 information. 8 You know from this trial that getting nonpublic 9 information from company executives and insiders was very 10 valuable to the defendant in the stock market. It meant that 11 the defendant knew tomorrow's news today. And that meant big 12 money for his funds and himself. 13 Knowing from an insider that a public company is about 14 to be acquired enabled him to buy stock in that public company 15 before the deal was announced to the public, when the average 16 ordinary investor didn't know and couldn't find out. 17 Knowing from an insider that a public company was 18 going to exceed or fall short of expectations that everyone 19 else expected the company to report for the quarter enabled the 20 defendant to trade based on information that he actually knew 21 from an insider, when the average ordinary investor didn't know 22 and couldn't find out. 23 Knowing from an insider that the public company was 24 about to report a corporate event that was significant enabled 25 the defendant to trade knowing what was going to actually SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5158 14K8RAJ1 Summation - Mr. Brodsky 1 happen, when the average ordinary investor didn't know and 2 couldn't find out. 3 You know that the defendant used a corrupt network of 4 insiders to gain access to the nonpublic information that was 5 being discussed behind closed doors. You know these insiders 6 were strictly prohibited from revealing these corporate secrets 7 to the defendant. Witness after witness from the companies 8 took that stand and told you how the company strictly 9 prohibited their employees, their executives from disclosing 10 this secret important information, material nonpublic 11 information, to outsiders. And you heard the defendant in his 12 own words ask the insiders for this information, and you heard 13 the insiders repeatedly, again and again and again, providing 14 it to him. 15 Recordings like Anil Kumar telling the defendant that 16 AMD had just shaken hands on a deal that is going to be 17 announced weeks later. 18 Recordings like Rajiv Goel telling the defendant that 19 the Intel board of directors had just approved a billion dollar 20 investment in Clearwire. 21 Recordings like Adam Smith calling up the defendant, 22 getting on the phone and telling him that they just received 23 another illegal tip from Kamal, this one relating to the stock 24 called Vishay. 25 Recordings like Danielle Chiesi telling the defendant SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5159 14K8RAJ1 Summation - Mr. Brodsky 1 that her insider at Akamai had just told her that Akamai was 2 going to guide down, and then the defendant, after Akamai 3 guides down, calling her up to thank her for that information. 4 Recordings like the defendant telling employees how he 5 traded based on tips from a board member of Goldman Sachs. 6 And you heard the defendant committing his crimes time 7 and time again in his own words. Every time the defendant got 8 secret information from Anil Kumar, he committed a crime. 9 Every time he got information from Rajiv Goel that was secret 10 information about Intel, he was committing a crime. By 11 stealing the nonpublic information from these firms and 12 corporations, the defendant committed the crime of insider 13 trading repeatedly. 14 You also heard the defendant in his own words scheming 15 with some of his partners in crime to cover his tracks to avoid 16 getting caught, actions that showed the defendant knew what he 17 was doing was not only wrong, but illegal. 18 Recordings like the defendant who directed two of his 19 employees to create a cover e-mail trail to cover up the fact 20 that Kumar had just tipped them on yet another stock. 21 Recordings like the defendant telling a partner in 22 crime, with whom he exchanged inside information, one way to 23 cover up their tracks was to buy and sell, buy and sell, to 24 create a false appearance that the trading wasn't based on 25 inside information. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5160 14K8RAJ1 Summation - Mr. Brodsky 1 Recordings like the defendant and his brother plotting 2 to corrupt another McKinsey partner in the same way the 3 defendant had corrupted Kumar. 4 The tapes were devastating evidence of the defendant's 5 crimes in real time, and as you have seen, they alone are 6 powerful evidence that the defendant is guilty of all the 7 crimes. 8 You also heard from two of the insiders who described 9 how they breached their duties to their employers, and they 10 disclosed corporate secrets to the defendant knowing he was 11 going to trade based on that information. 12 One of those insiders you heard from was the McKinsey 13 consultant Kumar, who told you he illegally tipped the 14 defendant about AMD's strategic plans, about AMD's acquisition 15 of ATI, and a number of other corporate events. 16 Another was the Intel executive Rajiv Goel, who told 17 you he breached his duties to Intel when he was disclosing 18 Intel's billion dollar investment in Clearwire and the details 19 relating to that deal, and he also disclosed Intel's quarterly 20 earnings in April of 2007. 21 You heard from a third who didn't take the witness 22 stand who wasn't present for the trial. You heard from a 23 Goldman Sachs board member over a recorded conversation, who 24 was caught on tape, providing inside information over the phone 25 and whom Rajaratnam later told other employees had given him SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5161 14K8RAJ1 Summation - Mr. Brodsky 1 tips about yet to be announced events relating to Goldman 2 Sachs. 3 You also heard from one of his trusted former 4 employees Adam Smith, who described how he obtained inside 5 information from the investment banker Kamal Ahmed and then 6 shared that information with the defendant, and he also 7 described how the defendant told him how to cover his tracks 8 with cover e-mails, with buying and selling, and by not putting 9 things in writing. 10 The defendant's insider trading schemes helped him pad 11 his profits in the funds that he was managing. And by 12 increasing these profits, he made more money. And these 13 schemes also helped Galleon become more successful, and they 14 kept the defendant at the top, in what clearly became a game to 15 be the best in a highly competitive industry, to conquer the 16 stock market at the expense of the law and every ordinary 17 investor.