Legal News

Galleon founder wins stay of wiretaps in civil case

By (Breaking Legal News)

Galleon hedge fund founder Raj Rajaratnam, accused of insider trading along with several associates, won a suspension of a court order to hand over wiretap evidence to U.S. market regulators, pending appeal.

The U.S. Court of Appeals for the 2nd Circuit in New York ordered a stay in favor of Rajaratnam and co-defendant Danielle Chiesi on Wednesday after a lower court order in February compelled them to disclose wiretap evidence gathered in the criminal case.

Lawyers for Sri Lanka-born U.S. citizen Rajaratnam and former New Castle Funds LLC trader Chiesi are seeking to suppress 18,000 recordings in what U.S. prosecutors describe as the biggest hedge fund insider trading case in the United States.

A trial on civil fraud charges brought by the U.S. Securities and Exchange Commission was set to start in August before U.S. District Judge Jed Rakoff.

Rajaratnam's lawyers argued before a three-judge appeals court panel on Tuesday that the use of the recordings in the SEC case ignored "the plain text" of the wiretap statute and privacy concerns.

Full post as published by Breaking Legal News on March 24, 2010 (boomark / email).