Posted Nov 24, 2010 08:50 pm CST
In a groundbreaking $20 million insider-trading case based on wiretaps, a federal judge has ruled that thousands of hours of secretly recorded telephone conversations may be used as evidence by federal prosecutors in a case against Raj Rajaratnam, the founder of Galleon Group.
Although the defense argued that the Securities and Exchange Commission had not exhausted traditional methods of gleaning evidence before recording conversations among Rajaratnam and 130 colleagues, family members, friends and others, U.S. District Judge Richard Holwell held today that the evidence likely might have have been missed without the wiretaps, reports the Wall Street Journal (sub. req.).
The case is being prosecuted in the Southern District of New York. Representatives of Rajaratnam and another defendant adversely affected by the evidentiary ruling declined to comment, reports Bloomberg.
Additional and related coverage:
ABAJournal.com (Oct. 2009): “Secret SEC Data-Mining to Fuel New Insider-Trading Cases; Lawyers Targeted”
ABAJournal.com (Nov. 2009): “Law Firms Review Compliance Measures After Attorney Arrests in Insider Cases”
ABAJournal.com (Nov. 2009): “Galleon Founder Challenges Wiretaps, Defends Investment Research”
ABAJournal.com: “Feds Start Raids in Massive 3-Year Insider-Trading Probe of Financial Industry”