A federal judge has ruled that prosecutors haven’t given Galleon Group founder Raj Rajaratnam and former New Castle Partners executive Danielle Chiesi enough information about the insider-trading charges against them.
U.S. District Judge Richard Holwell ordered prosecutors to provide more details about the insider tips Rajartnam and Chiesi are accused of trading and trading on. In cases involving acquisitions, prosecutors must specify the name of the target acquisition, the substance of the information provided, the date the tip was received and who passed it along.
“It matters when the information was conveyed,” the judge ruled. “Information about an upcoming acquisition may be material and nonpublic on one day, and public the next day.”
Prosecutors do not have to itemize the trades included in the conspiracy charges or give further details about allegations stemming from the wiretaps at the heart of the case, as those taps have already been turned over.
“A defendant might argue that the information he sought to obtain was not material, or that it was already public at the time he tried to get it,” Holwell wrote. “But he can only do that if he knows what the information is and when it was conveyed.”