Thursday, 21 August 2014
Last updated 10 hours ago
Apr 21 2011 | 10:35am ET
Five men set to face trial next month as alleged members of the Galleon Group insider-trading ring will face the same handicap as Galleon founder Raj Rajaratnam: thousands of wiretaps.
A federal judge yesterday rejected former Galleon trader Craig Drimal's bid to have the wiretaps tossed. U.S. District Judge Richard Sullivan followed the precedent set by his colleague Richard Holwell, who is presiding over the Rajaratnam trial, and, like Holwell, found some of the Federal Bureau of Investigation's practices troubling. But, he ruled, "given the wiretap's scope and the substantial manpower needed to sustain it, the court concludes that, on the whole, the wiretap was professionally conducted and generally well-executed."
The judge blasted the FBI's "apparently voyeuristic intrusion" on phone calls between Drimal and his wife, including one "deeply personal and intimate discussion about their marriage."
But Sullivan concluded that the errors were made "when agents we presumably still learning to recognize the voices of Drimal's interlocutors as well as identify their patterns of conversation."
"Having reviewed the wiretap in its entirety, the court is persuaded that in the vast majority of calls, the government's monitoring of the Drimals' spousal communications was reasonable," Sullivan wrote.
Drimal is set to go on trial alongside Zvi Goffer, the alleged head of the second of two interlocking insider-trading rings. Goffer, like Drimal, is a former Galleon trader. His brother, Emanuel, and Michael Kimelman, who both worked at Goffer's Incremental Capital hedge fund, are also charged, as is Jason Goldfarb, a lawyer at the law firm which allegedly provided many of Goffer's tips.
Aug 4 2014 | 7:42am ET
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The Alpha Pages Editor's Note