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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Travis_Bickle who wrote (186138)	2/2/2010 5:47:05 PM
From: stockman_scott	Respond to of 362862

Bar Galleon Wiretaps From SEC Trial, Defense Urges (Update3) By David Glovin Feb. 2 (Bloomberg) -- Lawyers for Galleon Group LLC founder Raj Rajaratnam and ex-trader Zvi Goffer moved to block the U.S. Securities and Exchange Commission from using wiretap recordings obtained from prosecutors in the agency’s insider-trading suit. Goffer’s lawyer, Cynthia Monaco, said Jan. 29 in a letter to a federal court that she wants a hearing “to explore the facts of this unauthorized disclosure and to fashion an appropriate remedy” such as barring the use of the recordings at a trial. “The government has turned over sealed wiretap communications without court authorization, leaving them subject to suppression,” Monaco wrote to U.S. District Judge Jed Rakoff in New York. Her letter followed a letter to the same judge two days earlier, in which Assistant U.S. Attorney Jonathan Streeter said prosecutors inadvertently gave the SEC some wiretap recordings without court permission. The SEC is to begin a trial Aug. 2 in Rakoff’s court in the civil lawsuit against Rajaratnam and Goffer over allegations of insider trading. Prosecutors have indicted Goffer and Rajaratnam on criminal charges as well. The secret recordings of those two and others are pivotal government evidence in the criminal case. Prosecutors provided 14,000 wiretap and other recordings to lawyers for Goffer, Rajaratnam and their co-defendants in the civil and criminal cases. SEC Recordings Bid Rajaratnam is accused of using secret tips from hedge fund executives, corporate officials and other insiders to earn millions of dollars in illegal stock trades. Because the SEC faces legal hurdles in obtaining the information from prosecutors, the agency asked a judge to order the defendants to surrender copies. Rakoff is weighing the request. Lawyers for the regulatory agency said it would be at a disadvantage at the trial without the recordings. Prosecutors said the law permits sharing with the SEC. Defense lawyers including Rajaratnam’s attorney John M. Dowd say the recordings are protected from disclosure by strict confidentiality rules. Dowd asked the criminal-case judge, Richard J. Holwell, to bar prosecutors from supplying the recordings. Prosecutors say in a letter to the judge that they “inadvertently provided a limited group of wiretap recordings to the SEC” and retrieved them immediately after learning they had done so. Attorney’s Letter Monaco says in her letter that the recordings cut to “the core of the government’s case” against Goffer and his co- defendants. She said the prosecutors, in a bid to avoid sanctions, now claim not to need court approval before sharing them. “They have already violated the sealing and disclosure requirements” of the wiretap law, Monaco wrote of the prosecutors. Lawyers for Rajaratnam and another defendant, hedge fund consultant Danielle Chiesi, have said that the government made 2,400 recordings of Rajaratnam, as many as 4,000 of Chiesi and thousands more of defendants Goffer, Craig Drimal and Ali Far. Far pleaded guilty and is cooperating with the government. Rajaratnam, Goffer and Chiesi are among 21 people accused in two waves of insider cases. Eight have pleaded guilty so far. Chiesi also opposes the SEC’s request for the recordings. Terence J. Lynam, a lawyer for Rajaratnam, said in a letter to Rakoff that the prosecutors are trying to “switch horses” in the middle of the case by claiming the right to disclose the documents after first seeking court approval to do so. ‘Law-Enforcement’ Question One issue is whether SEC lawyers are “law enforcement” personnel entitled to the recordings. Streeter, the prosecutor, said in his letter that prosecutors seek to share the wiretap evidence “in order to obtain assistance and expertise from the SEC in evaluating that evidence.” Goffer is accused of getting tips that originated from lawyers at the law firm Ropes & Gray LLP and to have passed the inside information to others. The leaks came while Goffer was working at Schottenfeld Group LLC in 2007 before joining Galleon, according to the indictment. The civil suit is SEC v. Galleon Management LP, 09-cv- 08811, and the criminal case is U.S. v. Rajaratnam, 09-cr-01184, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: David Glovin in New York federal court at dglovin@bloomberg.net. Last Updated: February 2, 2010 15:31 EST