Wednesday, 31 August 2016
Last updated 25 min ago
Oct 4 2010 | 1:15pm ET
Galleon Group founder Raj Rajaratnam's lawyer told a federal judge today that prosecutors had "gamed the system" to win approval for the wiretaps at the heart of the insider-trading case against their client.
John Dowd argued that prosecutors misled the judge who authorized the wiretaps in early 2008 about the necessity of the wiretaps, noting that a Securities and Exchange Commission probe had turned up some 4 million documents. Prosecutor John Streeter told U.S. District Judge Richard Holwell, who is overseeing the criminal case against Rajaratnam and who ordered the hearing, that the wiretaps were necessary to produce sufficient evidence for the criminal trial.
Rajaratnam and his co-defendant, former New Castle Partners executive Danielle Chiesi, face decades in prison if convicted in the largest insider-trading case in U.S. history. Prosecutors are relying on some 2,400 conversations to prove their guilt in the $50 million insider-trading ring that has snared 21 individuals, many with hedge fund ties. A dozen have already pleaded guilty.
Rajaratnam and Chiesi have pleaded not guilty. Their trial is set to begin in January.