Rajaratnam Tries to Prove Recordings Can't Be Used in Insider-Trading Trial

By Ed Silverstein, TMCnet Web Editor

Galleon Group co-founder Raj Rajaratnam is seeking to show that U.S. agents acted illegally when they wiretapped his communications and that the recordings can’t be used in his criminal insider-trading trial.

Bloomberg (News - Alert) reports that a hearing today in federal court in Manhattan, Rajaratnam was trying to convince U.S. District Judge Richard Holwell that the government misled a different judge into authorizing the wiretaps in March 2008.

As a result, the wiretaps, the centerpiece of the biggest insider-trading prosecution in history, must be thrown out, he claims, Bloomberg reports.

Rajaratnam, 53 is accused of using tips from company executives, hedge-fund employees and others in a multimillion- dollar insider-trading scheme, according to Bloomberg.

A total of 21 suspects were charged in the case.

Rajaratnam, who denies wrongdoing, faces as long as 20 years in prison if convicted.

Bloomberg reports that the government secretly recorded about 2,400 conversations between Rajaratnam and more than 130 friends, business associates and alleged accomplices. The evidence against him will include testimony from some of the people caught on the wiretaps, the government said. Federal authorities say it’s the first insider-trading prosecution to use wiretap evidence.

Today’s hearing was ordered by Holwell, who said that Rajaratnam may try to prove whether an affidavit supporting the government’s wiretap application improperly failed to disclose previous probes by the Federal Bureau of Investigation and Securities and Exchange Commission into Rajaratnam, according to Bloomberg.

(source: http://legal.tmcnet.com/topics/legal/articles/106457-rajaratnam-tries-prove-recordings-cant-be-used-insider.htm)