We’re not saying there’s any foul play afoot at the Raj Rajaratnam trial, we’re just saying it’s interesting that the jury couldn’t come to a decision re: the Galleon founder’s guilt or innocence after 7 days of deliberating and now, they have to start all over due to the dismissal of one guy for “medical reasons,” the very same week Rajaratnam gets a doctor’s note saying he can’t report to court due to emergency surgery he had on his foot over the weekend to treat a “bacterial infection.”

Deliberations in the insider-trading trial of Raj Rajaratnam are to begin anew after a juror was dismissed for medical reasons. The prosecution and defense agreed to replace the juror with an alternate. The nine women and three men had been considering securities fraud and conspiracy charges in Manhattan federal court since April 25.

“The law requires you to base your verdict solely upon the evidence,” , U.S. District Judge Richard Holwell told the jurors in the courtroom today. “The verdict must represent the verdict of each juror, including the new juror that’s been seated.”

[Bloomberg]

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Deutsche Bank Profit Jumps (WSJ)
Deutsche Bank AG Thursday reported a 17% jump in first-quarter net profit, lifted by recent acquisitions and the performance of its investment bank, which held up well in tough market conditions that have pressured the results of its peers. Net profit for the quarter rose to €2.1 billion ($3.11 billion) from €1.8 billion a year earlier, matching the bank’s best previous quarterly result and beating analyst expectations of €1.89 billion.

Bernanke Starts Dialogue With The Public, Pledges To Keep Stimulus (Bloomberg)
“It’s not clear that we can get substantial improvements in payrolls without some additional inflation risk,” Bernanke said to nearly 60 reporters. “Ultimately, if, if inflation persists or if inflation expectations begin to move, then there’s no substitute for action,” he said. “We would have to respond.”

Exelon to Buy Constellation for $7.9 Billion (Reuters)
Power company Exelon is to buy rival Constellation Energy for $7.90 billion, the latest in a series of deals aimed at consolidating the fragmented industry. Under the terms, Constellation shareholders would receive 0.93 Exelon shares for each share they hold.

Jury Hears Tapes Again At Rajaratnam Trial (BW)
For the second day in a row, jurors asked Wednesday to listen to secretly recorded phone calls of hedge fund manager Raj Rajaratnam and other Wall Street insiders talking about a deal involving the Clearwire wireless company. Prosecutors at the Manhattan trial say the wiretaps prove the Galleon Group chief made tens of millions of dollars by trading on inside tips about earnings and mergers. Lawyers for the Sri Lanka-born Rajaratnam argue he relied on open sources for his decisions.

AIG To Sue Two Firms To Recover Losses (NYT)
The initial suit, against ICP Asset Management and Moore Capital, will claim that A.I.G. suffered losses insuring mortgage securities created by ICP. The suit says ICP manipulated those securities in a way that benefited itself and Moore Capital, which is not accused of fraud, but harmed A.I.G.

Berkshire Fires Back Against Sokol’s Lawyer (Dealbook)
A Berkshire director and lawyer released a statement late Wednesday night saying that the company’s board sought to interview Mr. Sokol about his $10 million stake in Lubrizol, contradicting earlier remarks made by Mr. Sokol’s lawyer.

Nuns Rap Lloyd’s Knuckles (NYO)
“Whenever we’re shareholders in a company,” Sister Nora Nash told the Transom, “we believe in being active shareholders.” She then administered a further rap on the knuckles: “Because of the uncertainty of the global economy, we believe it would be wise for top executives to be more discretionary.”

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It’s possible, as this damn insider trading trial has left him with little time to focus on his team.

Leading the jury’s discussions is a 56-year-old man who has worked for two years as a graphic artist for Apple. A native of Manhattan’s Lower East Side, the juror, who was selected as foreman yesterday, has lived in the Bronx for about a decade. He’s one of three men on the 12-person jury. During jury selection seven weeks ago, he told the judge that he is married to a school teacher, reads Macworld and Sports Illustrated, and enjoys watching ESPN and “Man v. Food” and playing video games. “The basic guy stuff,” he said. He’s also a fan of the New York Knicks, who were swept this week by the Boston Celtics in National Basketball Association post-season play..

[Bloomberg]

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The Galleon founder demonstrated “in his own words” why he’s guilty of insider trading, Assistant US Attorney Reed Brodsky said in the government’s closing statement this morning.

Brodsky, of course, was referring to the various wiretaps played over the last several weeks that included conversations wherein Rajaratnam complimented Danielle Chiesi on how she “played” a tech exec into giving her material non-public information, told a friend he knew to buy shares of a company because “one of our guys is on the board,” and complained about a well-paid tipster slacking off on giving him the good stuff. In related news, don’t forget to vote in the Will He Or Won’t He (Go To Jail) poll, where so far 15% of people think Raj will get off.

[WSJ]

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Earlier today, Raj Rajaratnam’s 7-man legal team rested its defense of the Galleon founder, accused of insider trading. This unfortunately means that the man of the hour will not take the stand, as some had hoped, but there may be a few more surprises in store.

According to assistant U.S. Attorney Jonathan Streeter, the prosecution will be playing two more wiretap recordings of Rajaratnam. So far we’ve heard conversations in which Raj can be heard complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” in addition to being told told that his brother felt the need to destroy his “private notebooks” and that he paid former McKinsey exec Anil Kumar $1 million for his tip about AMD’s acquisition of ATI. Additionally, last week it was disclosed (by the prosecution), that the defense’s “star” witness, Richard Schutte, got a $15 million investment in his hedge fund by the Rajaratnam family two weeks before he took the stand to tell the jury Raj was “amazingly well-educated on the issues” and never asked for material, non-public information in Schutte’s presence. Despite all that looking kind of bad for Raj-Raj, a business school professor said on Friday that, in his opinion, it’s *possible* the accused manager made the trades in question without inside info. So this thing could really go either way.

Rajaratnam Defense Rests [Bloomberg]

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On Friday, Gregg A. Jarrell, a finance professor at the University of Rochester’s graduate business school, took jurors through a variety of Mr. Rajaratnam’s trades, showing chart after chart of information he said he was publicly available before any alleged tips to Mr. Rajaratnam. “In your view, is that information consistent with a reasonably sophisticated investor buying shares of Clearwire in this period?” asked Terence Lynam, one of Mr. Rajaratnam’s lawyers, referring to one of the trades at issue. “Yes,” Mr. Jarrell said. [WSJ, verdict poll]

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Thursday afternoon marked a turning point in the Raj Rajaratnam trial. While jurors had already been played tapes of Raj complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” been told that his brother felt the need to destroy his “private notebooks,” and heard testimony from a former McKinsey exec that Raj paid him $1 million for his tip about AMD’s acquisition of ATI, they’d yet to be shown evidence of the Galleon founder’s massive pair. Until yesterday.

As we briefly discussed, during the cross-examination of defense witness Richard “Rick” Schutte, Galleon’s former head of research, prosecutors asked if it was true that Raj was a big investor in Schutte’s new fund and if, after an initial investment of $10 million several months back, the Rajaratnam family pitched in another $15 million just two weeks back? Indeed he was and they had! Since then followers of the case have suggested, by saying outright, that Schutte was paid off to say things like he never saw Raj asked for inside information, Raj was just really “well-educated on the issues,” and so on and so forth, and that the jury will surely see this a window into Raj’s corrupt soul.

Or will they?

Perhaps, instead, the initial reaction by members of the jury was, “Paying a guy scheduled to speak about your character millions of dollars before he took the stand in your insider trading case, a gift you’d had to have known people would find out about? That took balls. I like it.”

Or not! It’s all relative. In any event, it’s time to start taking bets.

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Ahead of his trial for insider trading, the array of insider information that Zvi Goffer AKA Mr. Octopussy AKA Dances with Tracksuits allegedly dipped each and every one of his tentacles in has resulted in 6 extra charges, bringing the ex-Galleon trader and founder of Incremental Capital’s total to 14.

The investigation of Zvi Goffer, Jason Goldfarb, Craig Drimal, Michael Kimelman and Zvi’s brother Emanuel Goffer was connected to the one that ensnared Galleon Group founder Raj Rajaratnam, whose trial is ongoing in lower Manhattan federal court. The five men weren’t immediately reached for comment. The ring involving Mr. Goffer, who authorities said was nicknamed “Octopussy” because he had so many sources of information, overlapped with the chain of information leading to Mr. Rajaratnam, prosecutors have said. Overall, 19 of 26 people charged in the probe have pleaded guilty.

The 14-count indictment charges Mr. Goffer with six new counts of securities fraud relating to alleged insider trading in the stocks of 3Com Corp. and Axcan Pharma Inc. and drops one count from the indictment handed up in January 2010. Mr. Drimal is charged in four of the new counts, and Mr. Kimelman and Mr. Goldfarb in one each. The men are all charged with conspiracy to commit securities fraud as well.

New Charges In Insider Trading Case [WSJ]

Earlier: Alleged Insider Trader Emanuel Goffer “Needs A Hug”
The Morning After: Incremental Capital Holiday Party

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Is it soon after ex-Galleon employee Adam Smith told the jury that whereas standard research jobs at hedge funds require analysts to “do your homework ahead of time,” he was expected to “cheat on the test“? Or do we have another few weeks? In related news, how long before Raj convinces the little brother always willing to take a bullet for him to pull a Jose Canseco while Raj maxes and relaxes on the beach? [Bloomberg]

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If you’ve been keeping up with the Raj Rajaratnam insider trading trial, you may have come to the conclusion that things have not been going so hot for the Galleon founder. Though he is of course innocent until proven guilty, so far jurors have heard that Raj’s brother felt the need to destroy his big brother’s “private notebooks,” tapes of Raj telling Danielle Chiesi to keep their dealings on the down low, tapes of Raj telling a friend he knew to buy shares of a company because “one of our guys is on the board,” and testimony from former McKinsey exec that Raj paid him $1 million for his tip about AMD’s acquisition of ATI, leaving one to conclude Rajaratnam doesn’t have a snowball’s chance in hell of getting off. Unless, of course, some sort of improbable information emerged, like evidence that it wasn’t actually Raj on all those taped phone calls, or the 7-man defense team caught a lucky break. A tip, if you will, that they’d be fools not to trade on.

Without involving ourselves, we’re just going to throw it out there that Manhattan Assistant US Attorney Jonathan Streeter, the lead prosecutor on this case, may or may not be able to be bought. According to the latest issue of a real publication called WaterSki magazine, Streeter is a huge water skiiing fan who keeps a boat upstate, having honed his craft as a kid on Lake Michigan, and later, with summers on Lake Winnipesaukee, where he left his boat without a cover every night until it sunk after a storm one night. The incident didn’t deter him and one day last fall, Streeter cut out of trial prep to take part in a photoshoot of New Yorkers skiiing the hudson, after receiving a call just that morning asking if he wanted in.

Streeter “cabbed it from his office” to Chelsea Piers, the mag says. The accompanying photo shows him stepping out of a yellow cab in a dark suit with a giant smile. Sarah Kinbar, who wrote the story, told On The Money the shoot happened on a Monday and says the event was planned so last-minute Streeter had to change in a restaurant bathroom. The prosecutor, who’s now tied down to the Manhattan federal courtroom where the trial just capped off its third week, is quoted as saying, “I had to show up. I’m always psyched to ski.”

Does this mean Streeter can for sure be had? We’re not saying that at all. All we’re doing is putting information out there that seems to imply the prosecutor works to waterski, and asking, what if a benefactor could make it so he could waterski as work? And suggesting it couldn’t hurt for Raj to write “get your skis shined up, grab a stick of Juicy Fruit, the taste is going to move you” on a sheet of paper, balling it up, and throwing it in Streeter’s direction, just to gauge interest.

Take Me To The River [NYP]

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