Unsurprisingly, the Securities and Exchange Commission isn’t as enamored of Raj Rajaratnam’s plan to keep the wiretaps at the center of the insider-trading case against him from them for a little longer.
In court papers filed yesterday, the SEC demanded that the Galleon Group founder turn the taps over immediately. The agency wrote “there is no telling how much additional material will be contained on the intercepts that warrants follow-up by the SEC.”
Earlier this month, Rajaratnam’s lawyers offered to turn over the taps that they deem relevant to the civil case against their client at the end of his criminal trial, due to begin next month. To do so earlier would unnecessarily violate Rajaratnam’s privacy and the privacy of those he had taped conversations with.
Rajaratnam received the more than 18,000 wiretaps from prosecutors as part of discovery in the criminal trial. The judge overseeing the civil trial rejected Rajaratnam’s bid to block the SEC from getting them—the accused insider-trader argued that the SEC had no authority to use taps. U.S. District Judge Jed Rakoff ruled that it would be unfair for Rajaratnam to have the crucial evidence in the civil case while keeping it from the SEC.
The Justice Department said it does not have the authority to simply hand the wiretaps to the SEC.
An appeal court stayed Rakoff’s ruling pending the decision of U.S. District Judge Richard Holwell, who is overseeing the criminal trial, on the legality of the wiretaps. Holwell ruled the taps admissible in November.
Rajaratnam’s legal team says that only 240 of the taped conversations are relevant to the SEC case.