Lawyers for hedge fund tycoon Rajaratnam have sought to show that he relied on public information to do his trades, rather than on insider information from tipsters, including a couple of Indian Americans.
Cross-examining ex-Galleon Group trader Adam Smith, who has pleaded guilty in the biggest US insider trading trial Thursday, defence attorney Terence Lynam showed several e-mails from analysts, both inside and outside Galleon.
These e-mails providing public information on company stocks, such as ATI Technology and Intel were intended to show that Smith was not the only conduit for the Galleon Group founders' decisions on trades.
Sri-Lankan born Galleon Group co-founder Rajaratnam, who has been charged with making $45 million from stock tips provided by contacts in major corporations, has denied any wrong doing.
Buttressing his argument that Rajaratnam bought shares in ATI and other companies for lawful reasons and not because Smith, 39, had come into inside information, Lynam noted that Rajaratnam didn't buy stock at the same time Smith did.
"He's not buying when you're buying?" Lynam asked Smith about purchases of Intersil Corp. Smith had testified that he got leaks from an Intersil insider and passed them to his boss.
Lynam also asked questions suggesting his client didn't grasp that Smith was referring to a source of inside information during a phone call between the two that the government secretly taped.
"You have no idea that when you got on the phone and mentioned Kamal, that he knew who that was?" Lynam asked Smith.
Jurors previously heard a recording of Smith telling Rajaratnam that "Kamal"-who he said was Kamal Ahmed, a Pakistani-American Morgan Stanley investment banker-said Vishay Intertechnology Inc. (VSH) may be selling itself.
Ahmed, who has not been charged, denies wrongdoing.
Smith testified Thursday that he tipped Rajaratnam that Integrated Device Technology was in talks to acquire Integrated Circuit Systems in early 2005 after learning about the deal talks from his friend Kamal Ahmed.
Smith said that after he met with Ahmed on March 9 in California, he sent Rajaratnam an e-mail about "the two eyes", his code name for the companies, saying: "We are still on track."
On March 17 at about 10 pm, Smith sent Rajaratnam another e-mail stating "Game on", which he said was code to let him know that the merger was moving forward.