SEC Got Galleon Wiretaps By Mistake

Feb 3 2010 | 2:08pm ET

Federal prosecutors mistakenly sent some of the wiretaps at the heart of the Galleon Group insider-trading case to the Securities and Exchange Commission, the regulator and the U.S. Attorney’s office acknowledged.

The SEC, which has asked a judge to allow it to use the wiretap evidence in its civil case against the alleged Galleon conspirators, said it had not listened to the tapes and had returned them to prosecutors. But lawyers for Galleon founder Raj Rajaratnam and former Galleon employee Zvi Goffer demanded that the SEC be barred from using the evidence and demanded a hearing on the disclosure.

U.S. District Judge Jed Rakoff is expected to rule on the matter this week.

Cynthia Monaco, Goffer’s lawyer, claims prosecutors blind copied the SEC on documents being disclosed to defendants. The U.S. Attorney’s office denies doing so.

“They have already violated the dealing and disclosure requirements of Title III and are seeking an alternative means to justify production,” she wrote to the judge.

Lawyers for the defendants in the SEC case were already trying to get the wiretap evidence banned from both the criminal and civil cases, arguing that they were unlawfully obtained. The defense has also argued that the SEC cannot use wiretaps because it is not a law enforcement agency.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...