Rajaratnam Gets His Money's Worth With Solid Defense

Considering the mountain of evidence suggesting Raj Rajaratnam's guilt in the Galleon Group insider trading case, most prognosticators expect a conviction, and with it a harsh prison sentence.

But Breakingviews praised the strategy taken by Rajaratnam's lawyers to paint their client as a diligent investor, whose firm created a "mosaic of data on a company," of which not a single tidbit was enough to be material to an investment decision. Under that logic, Rajaratnam isn't guilty of insider trading.

The defense only needs one juror to buy this argument. And even if he's found guilty, the tactics they deployed could sway the judge into giving Rajaratnam a lighter sentence.

From Breakingviews:

This defense is controversial, but not frivolous. It paints a picture of a diligent, if aggressive, investor. Only one of the jury members has to buy it to spare Rajaratnam. And even if none of them does, the judge might - and he has discretion to lighten any sentence.

Of course it could all backfire, with the jury and judge concluding that the Galleon founder is an even bigger crook than many expect. But that's always a risk. In most scenarios Rajaratnam is no worse off - and potentially better - than had he pleaded guilty. And this way, if the worst happens, he can claim he was nailed by an ignorant jury and appeal. All he has to lose is the cost of his lawyers, and he's a billionaire.