U.S. SEC Scores Major Win in Dispute over Wiretaps in Hedge Fund Insider Trading Case
February 11, 2011 in Securities Regulation & Law Report
In a major coup for the Securities and Exchange Commission, the U.S. District Court for the Southern District of New York Feb. 1 ordered Galleon Management LP principal Raj Rajaratnam to provide the agency with wiretap evidence obtained by prosecutors in a related criminal case for use in its civil insider trading action (SEC v. Galleon Management LP, S.D.N.Y., 09 Civ.-8811 (JSR), 2/1/11).
In the order, Judge Jed Rakoff directed Rajaratnam and co-defendant Danielle Chiesi to turn over all communications “they have now conceded are relevant” to the SEC’s case by Feb. 4, and the remaining documents sought by the commission no later than Feb. 11. Rakoff said he will explain his reasoning in a forthcoming memorandum.
In a statement, George Canellos, director of the commission’s New York Regional Office, said, “We are pleased by the judge’s order, which will help ensure a full and fair trial of the SEC’s case based upon all of the relevant evidence.”
In a telephone conversation, a spokesman for Rajaratnam said, “We will comply with the order.”