Legal News

In Raj Trial, Asking ?Why?? Doesn?t Lead to Easy Answers

By Ashby Jones

After the frenetic opening week in the Raj Rajaratnam (pictured) insider-trading trial, Friday’s break provided a nice opportunity for WSJ reporters Susan Pulliam and Michael Rothfeld to take a step back and ask, well: “Why?”

That’s right, why? As they put it in this story: why would “rich, powerful people  . . . leak insider information and risk going to jail for it?”

The answers aren’t going to surprise anyone who’s taken a casual spin through Shakespeare. Or, for that matter, Tom Wolfe. “Blame it on the money,” write Pulliam and Rothfeld. “On the love. Or just a primal need to be liked.”

They continue:

Greed appears to be a top motivator [former McKinsey technology adviser Anil] Kumar and others, testimony and court documents show. But other less-obvious factors seemed to have played a role for the sources of Galleon Group’s Mr. Rajaratnam, including friendship, romance and a yearning for greater respect.

That’s right, romance. At least in regard to former IBM executive Robert Moffett, who leaked information to former hedge-fund manager Danielle Chiesi. Moffett began an “intimate” relationship with Chiesi while Moffett was married. Moffat, in his own letter to the judge, blamed “a misguided desire to appear important and knowledgeable, and to show Ms. Chiesi that I was ‘in the know.’ ”

Of course, while varied motives for insider trading by Rajaratnam’s alleged conspirators may surface, they aren’t necessarily legally relevant, says C. Evan Stewart, a partner at Zuckerman Spaeder in New York. “It’s the question, ‘Did you do it?’ ” he says, not if “you have a good intention or a bad intention. You passed it along to your mother because you love your mother…So what?”

Still, jurors and spectators are left to wonder. “The jurors are weighing the motivation of every witness who is testifying…to weave a compelling version of what happened,” says lawyer Andrew Stoltman, who isn’t involved in the case.

Full post as published by Law Blog - WSJ.com on March 14, 2011 (boomark / email).