Securities and Exchange Commission v. Galleon Management, LP et al

Filing 202

ORDER: Accordingly, the SEC requests that summary judgment practice be adjourned so that it may include its contemplated arguments regarding collateral estoppel in its papers. rd. at 3. The argument is not without force. However, the Court is not willing, given its own complicated trial schedule, which now extends until 2012, to move the trial from its long-set date of August 22, 2011. Fortunately, there is a way to accommodate the SEC's concerns without moving the trial date. First, the schedule for summary judgment for all parties not affected by the Rajaratnam verdict will remain as previously set. Second, if the SEC, Rajaratnam, or any other party affected by the Rajaratnam verdict wishes to have summary judgment practice after the July 29, 2011 sentence date, they may, in lieu of the aforementioned summary judgment schedule, proceed to summary judgment motion practice on the following expedited schedule: moving papers to be filed by August 3, 2011, opposition papers to be filed by August 9, 2011, no reply papers, oral argument on August 12, 2011 at 4:00P.M., and decision by August 15, 2011. (Signed by Judge Jed S. Rakoff on 6/6/2011) (js)

SECURITIES AND EXCHANGE COMMISSION,
09 Civ. 8811 (JSR)

Plaintiff,

v.

ORDER

GALLEON MANAGEMENT, LP, et al.,
Defendants.

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x

JED S. RAKOFF, U.S.D.J.
On January 31, 2011, the Court ordered that trial of the
remaining defendants in the above captioned case commence on August
22, 2011 at 9:00A.M.

See 01/31/11 Order.

That date was picked not

only because all the busy counsel in this case numerous adjournments -

who had requested

indicated that they would be available for

trial beginning on that date but also because the Court,
notwithstanding its complicated trial schedule, could guarantee its
own availability for a trial beginning on that date.

However, since

the resolution of this matter had been repeatedly frustrated by
multiple delays, the Court made clear that this date would remain
firm and fixed on the Court's calendar.

Correspondingly, summary

judgment brief ing, if any, was scheduled to begin in early July, with
moving papers to be filed by July 8, 2011i opposition papers to be
filed by July 22, 2011 i and reply papers to be filed by July 29, 2011.
A final pre trial conference, as well as oral argument on any summary
judgment motion(s), was set for August 5,2011 at 4:30P.M.

See id.

Notwithstanding the foregoing,

on May 24,

2011 the parties

jointly called Chambers and requested that the Court adjourn the
summary judgment schedule to follow the criminal sentencing of
defendant Raj Raj aratnam, which is currently scheduled to take place
before the Honorable Richard J. Holwell on July 29, 2011.
States v. Rajaratnam,

09 Cr. 1184

(RJH).

See united

In a subsequent letter

submitted May 27, 2011, the SEC explained that it intends to argue
in its summary judgment papers that Raj aratnam' s criminal conviction
precludes him from re-litigating many of the underlying facts and
claims at issue in the instant civil proceeding.

Specifically, the

SEC contends that collateral estoppel will bar Rajaratnam from
litigating Claims I and II of the Second Amended Complaint, and will
preclude him from disputing that he traded certain securities on the
basis of material, non-public information.
In the SEC's view,

therefore,

See SEC Ltr-Br. at 2.

following final judgment in the

criminal case, only the question of remedies will remain, which
itself will depend in part on the amount of criminal forfeiture
ordered at sentencing. 1

However, judgment in a criminal case is not

considered final until the sentence, see Corey v. United States, 375
u.S. 169, 174

(1963)

i

Berman v. united States,

302 U.S. 211, 212

1
"[Ilf the criminal forfeiture imposed deprives Rajaratnam of all
his ill-gotten gains, that forfeiture will likely impact what
disgorgement remains for the Commission to seek, if any."
SEC
Ltr-Br. at 3.

2

(1937), and the Second Circuit has therefore indicated that
collateral estoppel only applies in the criminal context after the
defendant has been sentenced.
124 (2d Cir. 1987).

See Sailor v. Scul

, 836 F.2d 118,

Accordingly, the SEC requests that summary

judgment practice be adjourned so that it may include its
contemplated arguments regarding collateral estoppel in its papers.
rd.

at 3.
The argument is not without force.

However, the Court is not

willing, given its own complicated trial schedule, which now extends
until 2012, to move the trial from its long-set date of August 22,
2011.

Fortunately, there is a way to accommodate the SEC's concerns

without moving the trial date.

First, the schedule for summary

judgment for all parties not affected by the Rajaratnam verdict will
remain as previously set.

Second, if the SEC, Rajaratnam, or any

other party affected by the Raj aratnam verdict wishes to have summary
judgment practice after the July 29, 2011 sentence date, they may,
in lieu of the aforementioned summary judgment schedule, proceed to
summary judgment motion practice on the following expedited
schedule: moving papers to be filed by August 3, 2011, opposition
papers to be filed by August 9, 2011, no reply papers, oral argument
on August 12, 2011 at 4:00P.M., and decision by August 15, 2011.
SO ORDERED.

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Dated:

New York, New York
June £, 2011

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