Previously, in chapters covering what to do if you find yourself in handcuffs (and not of the golden variety), we took a look at plea agreements (chapter 16), evidence shredding (chapter 17), and ratting out your accomplices (chapter 18). And in this chapter we look at the all-important choice between (1) testifying on your behalf, and (2) sitting still and saying nothing (that is, not testifying on your behalf).
Let's take the example of Galleon Founder Raj Rajaratnam. Tomorrow morning, jury selection begins in the SEC's case against Raj Raj in what's being called the biggest insider trading trial in a generation. The SEC has alleged that Raj Raj is guilty of some 14 counts of fraud and conspiracy, and, if convicted, the big hedge fund investor could see 10 to 20 years in the slammer.
Of course, Raj Raj's team of attorneys are feverishly working on their case so that doesn't happen. And, to that end, Raj Raj and team have indicated that the Galleon founder may take the stand and testify on his behalf.
Whether this is a bluff or not remains to be seen (as the Times has pointed out, "Hints that Mr. Rajaratnam will testify can be a useful defense tactic, requiring prosecutors to spend precious time and energy preparing for an event that may never come to pass."). But if the big guy does swear on the Holy Book, it will not only be must-watch Web TV, it will also be largely seen as an incredibly risky move. You see, as the WSJ and others have pointed out, if the history of white-collar criminal cases are any indication, having your defendant take the stand on his or her behalf is not such a hot idea.
Exhibit A: Dennis Kozlowski, the former Tyco CEO, now serving a sentence of 8 1/3 to 25.
Mr. Kozlowski didn't take the stand at his first trial, which ended in a mistrial. At the second trial, Mr. Kozlowski testified and was convicted with Mr. Swartz [Tyco's CFO, who also took the stand] on 22 of 23 counts related to bonuses and other improper compensation they received while working as Tyco's top executives. Mr. Kozlowski has been locked up since 2005.
Exhibit B: Former Bear Stearns hedge fund manager Ralph Cioffi, now a free man.
Cioffi avoid[ed] testifying at his criminal trial for alleged fraud related to subprime mortgage deals ... The defense was able to respond to incriminating emails introduced by prosecutors with other emails that were more favorable. Mr. Cioffi and another Bear fund manager, Matthew Tannin, were acquitted in 2009.
It perhaps should also be pointed out that if, like in Raj Raj's case, the prosecution plans to introduce your voice on over 100 hours of wire-tapped phone conversations, your testifying and adding more of your voice might be a bit overkill.
Who Might Testify in Galleon Trial (NYT)
Rajaratnam's Biggest Bet Yet (WSJ)
Career Guide to Insider Trading, Chapter 18: To Rat or Not To Rat
Career Guide to Insider Trading, Chapter 17: Evidence Shredding
Career Guide to Insider Trading, Chapter 16: Plea Agreements