Jurors were ordered to begin their deliberations from scratch Wednesday in the insider-trading trial of Galleon Group founder Raj Rajaratnam after a juror was dismissed.
A 70-year-old retired bookkeeper, Janette Kabat of Manhattan, was dismissed on Wednesday after U.S. District Judge Richard Holwell said she was unable to continue for "medical reasons." Deliberations were suspended Tuesday so that she could undergo a medical procedure.
When reached at home by phone, Kabat said she couldn't discuss the case. She said she would rather be at the courthouse than dealing with what she called a "very serious" medical issue.
"I put my all into it," she said of the case. Kabat declined to discuss her condition except to say, "I am overwhelmed with what's happened to me."
She was replaced by an alternate juror, a 39-year-old man who works for the Westchester County parks department. The judge had told alternate jurors not to read about the case and to be prepared to potentially be called upon if needed.
"The law requires that the jurors begin their deliberations anew," the judge said. "Accordingly, you must disregard your earlier deliberations and begin your deliberations anew."
Rajaratnam, who has denied wrongdoing, didn't come to court again on Wednesday. He missed the proceedings Monday after having emergency surgery on his foot because of a bacterial infection. "He's healing," said his lawyer John Dowd.
Rajaratnam, 53, is on trial on 14 counts of conspiracy and securities fraud in an alleged insider-trading scheme that involved company insiders and others leaking information about several publicly traded companies, including Intel Corp., Advanced Micro Devices Inc. and Google Inc.
His lawyers have argued that his trades were based on legitimate research and publicly available information.
As part of the renewed deliberation process, the jurors were instructed to again select a jury foreman and were ordered to turn in their old verdict sheet, which would be used to record their findings on each count, to the judge's courtroom deputy. The old verdict form was placed in a sealed envelope and the jury was given a new verdict sheet.
In a criminal case, the parties could have agreed to continue deliberations with 11 jurors, and the judge had the option of accepting a verdict from 11 jurors if the parties didn't agree to do so. However, the judge didn't dismiss the alternates after deliberations began, giving him the option to reseat an alternate juror.
Lawyers said the defense in most cases would favor the addition of an alternate juror, while prosecutors would want deliberations to continue with the 11 remaining jurors. The more jurors there are, the greater chance they will get hung up on one or more charges, benefiting the defendant, lawyers said.
"It's almost impossible to know whether this is good for the government or the defendant without knowing where the jury was up to when the substitution was made," said Benjamin Brafman, a longtime New York criminal-defense lawyer, who has no role in the case. That said, the defense more often than not would argue to have an alternate come in, rather than favor a smaller jury, he said. "The greater the number of jurors, the greater the chances are for a hung jury; it requires more people to all agree," Brafman said. "The injection after six days of deliberations of a new voice and a new vote may bring jurors who've already signed off on issues back to new discussion of those issues."
The judge announced the decision to seat an alternate juror after holding a closed hearing with the parties in his robing room off the main courtroom for about 20 minutes on Wednesday. This followed a prior closed hearing with the parties on Monday regarding Kabat's health issue.
In an order issued Wednesday, the judge gave his reasoning for sealing several transcripts of closed-door hearings he had with lawyers in the cases, saying the closure was required to protect "the secrecy and integrity of jury deliberations and privacy of deliberating jurors" and that there was a "substantial probability" that publicizing the sealed proceedings would prejudice the defendant's right to a fair trial.
After the new juror was seated, the jury asked to have a dozen secretly recorded telephone calls played for the benefit of the new juror as they restarted their deliberations. The wiretaps included about six calls between Rajaratnam and Anil Kumar, a former McKinsey & Co. consultant and cooperating witness.
Kumar testified earlier in the trial that he gave Rajaratnam tips on a deal involving AMD, as well as other tips about McKinsey clients. Kumar has pleaded guilty to conspiracy and securities-fraud charges.
One of the calls jurors asked to hear was a call with Kumar in October 2008, in which he appears to tip Rajaratnam about coming layoffs at eBay Inc.
"Ah Raj, eBay is gonna do massive layoff on Monday," Kumar said.
"They're gonna do what?" Rajaratnam asked.
"Layoffs on Monday," Kumar said.
"Okay," Rajaratnam said.
Rajaratnam's lawyers have argued that the eBay layoffs were already in the news at the time and Kumar was just passing along public information.
The jury is in the seventh day of its deliberations.
Chad Bray and Jenny Strasburg are reporters for The Wall Street Journal, where this story originally appeared. Write to Chad and Jenny.