NEW YORK — A wealthy hedge fund manager accused in a massive insider trading case that shook Wall Street was in command and above board while overseeing $6 billion in investments, one of his former lieutenants testified yesterday.
At daily 8:30 a.m. meetings at the Galleon Group’s headquarters on Madison Avenue, Raj Rajaratnam “was the most prepared of any of us,’’ Richard Schutte told jurors at Rajaratnam’s trial in federal court. “It was impressive to watch.’’
Schutte — an MIT graduate and former Goldman Sachs analyst hired by Rajaratnam in 2004 — was one of the first witnesses to testify for the defense.
A roster of government witnesses, including another Galleon executive who has pleaded guilty, have testified that Rajaratnam used inside, nonpublic information to gain an illicit advantage over other investors in high-stakes trades in technology, health care, and other stocks. The jury has heard recordings of the defendant’s phone conversations that prosecutors say show he was trading secrets on companies like Intel and eBay.
Schutte testified that Rajaratnam’s firm earned its success by relying on sophisticated analysis and research to trade up to 75 million stocks each day. He suggested his former boss had nothing to hide.
Prosecutors allege the Sri Lankan-born Rajaratnam, 53, used the inside tips to make $53.8 million in profits and avoid about $10 million in losses.