A lawyer at the second insider trading trial to result from a massive wiretap investigation of hedge funds introduced his defense to jurors Wednesday by saying his client was fired by a one-time billionaire hedge fund founder convicted of insider trading charges last week.
"Zvi Goffer, you're fired!" attorney William Barzee said Raj Rajaratnam told his client as he started his opening statement to a jury in U.S. District Court in Manhattan with a flourish.
Countering the portrayal of Goffer as the ringleaders of an insider trading conspiracy, Barzee said the founder of the Galleon Group of hedge funds fired Goffer because he lost nearly a million dollars through his trades. Then he told jurors they would see evidence that Goffer passed up opportunities to buy stocks after he supposedly had been given vital inside information that would have assured big profits.
"It would be like knowing the lottery numbers in advance and not buying a ticket," Barzee said. Goffer is on trial with his brother, Emanuel, and a third defendant, Michael Kimelman. Lawyers for both of the other men also told the jury their clients were not guilty.
The Miami defense lawyer's portrayal of Zvi Goffer was a response to Assistant U.S. Attorney Andrew Fish, who said in his opening that he will prove that Goffer and the other defendants conspired to pay cash to two lawyers at a Manhattan firm in return for inside information about prospective mergers and acquisitions.
Fish said the jury will hear a sampling of more than 1,000 telephone conversations recorded by investigators as part of a probe that became the biggest hedge fund insider trading case in history. In all, more than two dozen people were charged and the majority have already been convicted, most through guilty pleas. Rajaratnam was convicted at a trial of all 14 counts of conspiracy and securities fraud. He faces up to 20 years in prison at a July sentencing.
Prosecutors have said the probe marked the first extensive use of wiretaps in an insider trading case.
In a presentation that gave a colorful glimpse of the go-go world of stock trading on Wall Street, Barzee conceded that his client talked big, bragging about his ability to get an edge on other traders.
"It's something that traders do all the time. It's stupid. It's immoral. It's probably wrong. But it's not illegal. It happens every day," Barzee said.
Barzee described one of Goffer's contacts as a man who earned the nickname "G.Q." for "Gossip Queen" because he repeated whatever he heard from people about stocks.
The defense lawyer warned jurors to be on the lookout for evidence that prosecutors claim was inside information and how it matches up with items published in newspapers at the same time.
"Talk is cheap," he said.