The defense lawyer who spoiled Preet Bharara’s perfect record in hedge fund insider trading cases has finally gotten a haircut.
It’s not because the lawyer, Daniel M. Gitner, has been busy, although he certainly has been. The insider trading trial of his client, the hedge fund trader Rengan Rajaratnam, which lasted about three weeks, required him and his team to sift through 2.5 terabytes of data, enough to store “War and Peace” about 330,000 times. Until Tuesday night, his wife put their children to bed on her own.
Instead, as the freshly trimmed Mr. Gitner said in an interview on Wednesday: “It’s bad luck to get a haircut during trial.”
The haircut rule, which Mr. Gitner also imposes on his staff at the law firm Lankler, Siffert & Wohl, is nothing if not thorough, an attribute that associates ascribe to the 43-year-old former federal prosecutor, who, in that job, helped send the rapper Lil’ Kim and Omar Portee, a gang leader, to prison.
And it is that thoroughness that helped him rattle the office of Mr. Bharara, the United States attorney for the Southern District of New York.
Tuesday’s acquittal of Mr. Rajaratnam by a federal jury in Manhattan, after less than four hours of deliberation, was the first defeat for the office after 85 insider trading convictions and guilty pleas of hedge fund traders, analysts and others, including Mr. Rajaratnam’s older brother, Raj Rajatatnam, the founder of the Galleon Group hedge fund.
“There are a lot of great, great lawyers, and nobody had won one of these cases in so long,” Mr. Gitner said on Wednesday. “Just showing that you can do it is what the message is.”
In the wake of the financial crisis, public anger with Wall Street continues to simmer, and it may be hard for jurors to sympathize much with those who have been accused of insider trading.
The public’s lingering resentment, and Mr. Bharara’s winning streak, was a cause for concern for Mr. Gitner, who, like other white-collar defense lawyers, worries that negative public opinion about those perceived to be Wall Street insiders, like the younger Mr. Rajaratnam, may be too much to overcome in a trial.
“This case showed, at least in some respect, while that may be present, it’s not always going to be,” Mr. Gitner said. “Juries will truly weigh the evidence and the lack of evidence.”
In 2011, Raj Rajaratnam was sentenced to 11 years in prison, the longest punishment ever meted out for an insider trading case. Rengan Rajaratnam was accused of conspiring with his brother to trade on nonpublic information.
Gregory Morvillo, a criminal defense lawyer, said the verdict could reflect the fact that after nearly 100 insider trading cases, the pipeline of prosecutions stemming from the Galleon hedge fund is nearing an end.
“Eventually you get to the point where the cases get weaker and weaker, and they become harder to prove,” Mr. Morvillo said.
Mr. Rajaratnam still faces a civil action brought by the Securities and Exchange Commission. But the verdict on Tuesday was enough to prompt hundreds of congratulatory emails to Mr. Gitner from colleagues, friends and lawyers.
“I stayed up all night responding to every single one of them,” he said.
A graduate of Cornell and Columbia Law School, Mr. Gitner clerked two decades ago for Judge Naomi Reice Buchwald, the Manhattan federal judge who oversaw the trial of Mr. Rajaratnam. That history prompted grumbling among some law enforcement officials.
“Every judge has clerks who appear before them all the time,” Mr. Gitner said. “Any suggestion that any judge in this district would treat a party differently because their clerk represented that party is ridiculous.”
Judge’s clerks, of course, go on to work for the government, as well as for private practice. The world of white-collar defenders, federal prosecutors and judges can be a small one.
When Gary P. Naftalis represented Rajat Gupta, the former McKinsey & Company chief, in another prominent insider trading case, it was noted that the defense lawyer had close ties to the presiding judge. (Mr. Gupta was convicted.) Mr. Gitner himself lost the previous case he argued in Judge Buchwald’s courtroom when he represented Helen Gredd, a trustee who tried to sue Bear Stearns on behalf of investors in 2008.
“I think that’s an outrageous criticism,” said Harry S. Davis, a partner at Schulte Roth & Zabel who argued against Mr. Gitner in the Gredd case. “I never once thought that she was issuing a ruling designed to help Dan because he was a former clerk.”
As a prosecutor and as a defense lawyer, Mr. Gitner has earned a reputation for meticulousness, the kind of exhaustive effort required to pore over thousands of pages of complicated trading data in Mr. Rajaratnam’s case.
“He presents as somebody who has a deep sense of both the facts and of the truth,” said Steven M. Cohen, the general counsel for Ronald O. Perelman’s firm, MacAndrews & Forbes Holdings, who worked with Mr. Gitner at the United States attorney’s office. “In many ways, he is very effective because of what he doesn’t do. He doesn’t bang the table. He doesn’t insist he’s right. He walks you through a problem.”
In Mr. Gitner’s recently renovated Midtown Manhattan office, fat case files line the floor and framed posters lean unhung against a wall.
One poster of the “Obey” design from Shepard Fairey came from the artist himself, after Mr. Gitner successfully kept him out of jail in 2012. Mr. Fairey was accused of destroying evidence relating to a civil case involving his use of an Associated Press photograph to create the “Hope” poster from Barack Obama’s 2008 presidential campaign.
“I got on the phone, and he was pleasant, but he was immediately trying to feel out every aspect of the situation,” Mr. Fairey recalled of their first interaction. “More or less, I felt like I was on the stand from the very beginning.”
The case, too, required Mr. Gitner and his team to sort through mountains of information — taking so much time, in fact, that Mr. Fairey bartered some of his original artwork to help ease his legal fees.
“It was very expensive for me to retain him,” Mr. Fairey said. “It was definitely worth it.”