Judge: Rajaratnam Must Turn Over Wiretaps To SEC

Feb 2 2011 | 10:35am ET

The Securities and Exchange Commission can have the wiretaps at the center of the insider-trading case against Galleon Group founder Raj Rajaratnam, a federal judge has ruled.

U.S. District Judge Jed Rakoff yesterday ordered Rajaratnam and co-defendant Danielle Chiesi—who has pleaded guilty to criminal charges in the case but remains a defendant in the SEC's civil case—to hand over all of the wiretaps that the SEC wants by next Friday. He gave them an even shorter deadline for those communications "they have now conceded are relevant," demanding they be turned over by this coming Friday.

Rajaratnam's spokesman said he would comply with the order.

Rakoff's ruling is yet another blow to Rajaratnam, who has suffered a series of setbacks in the weeks leading up to his Feb. 28 criminal trial. Last month, Chiesi struck a plea deal with prosecutors, although she is not expected to testify against him. Two former Galleon employees also pleaded guilty in the case and may be called as witnesses against him.

Rakoff also postponed the civil trial to Aug. 22; it had been scheduled to begin on Feb. 14. He also severed the case of another hedge fund manager accused of insider-trading in the case, Zvi Goffer, from that of Rajaratnam and Chiesi. Goffer, who formerly worked at Galleon, was allegedly the head of a second insider-trading ring that overlapped with the one allegedly run by Rajaratnam.

It is the second time the Rakoff has ordered Rajaratnam and Chiesi to turn over the wiretaps; he did so last February only to have an appeals court overturn him, pending the criminal trial judge's ruling on their legality. Unfortunately for the defendants, U.S. District Judge Richard Sullivan found the intercepted conversations admissible in November.


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.