FBN’s Senior Correspondent Charlie Gasparino reports that the criminal trial of Galleon Group LLC co-founder Raj Rajaratnam for insider trading “may be over before it even begins.” Raj Rajaratnam’s rationale for the Goldman Sachs (GS) stock purchase is “that he knew that Goldman Sachs was going to get a capital infusion,” but Gasparino points out there is a problem with this defense because “capital infusion was not part of the original plan.” Excerpts from the report can be found below, courtesy of Fox Business Network.
On the potential hole in Rajaratnam’s defense:
“Raj Rajaratnam’s explanation doesn’t wash. There’s a big hole in the trial. The rationale for his buying of Goldman Sachs shares is that he knew that Goldman Sachs was going to get a capital infusion. But, follow this timeline. I break the initial bailout story 3 days after Lehman filed for bankruptcy on September 18. On September 23, Raj made that purchase of Goldman stock. On October 3, the TARP law was approved by Congress. One big problem: capital infusion was not part of the original plan. That came much later when Hank Paulson, the former US Treasury Secretary, realized that buying the toxic assets off the balance sheets of the banks, which was the initial plan, would not work. But, how did Raj Rajaratnam know that Hank Paulson was going to change his plan when it wasn’t even discussed in Washington? We are asking for comment but they have yet to get back to us. If this is true, this trial may be over before it even begins.”