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

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of