SEC wants Rajaratnam to turn over wiretaps

NEW YORK -The U.S. Securities and Exchange Commission wants Galleon Group founder Raj Rajaratnam and other defendants in a civil insider- trading case to turn over wiretap materials they have received from prosecutors in separate criminal cases against them.
In a letter dated Jan. 20 and made public on Monday, lawyers for the SEC asked U.S. District Judge Jed S. Rakoff in Manhattan to order Rajaratnam and other defendants to turn over any wiretap materials received from prosecutors from the U.S. Attorney’s office in Manhattan.
The judge didn’t rule on the disclosure request at a hearing Monday, but said he might issue a ruling sometime next week after additional briefings by the lawyers.
“The wiretap materials now in defendants’ possession include recordings of their communications made during a covert insider-trading investigation conducted by the USAO, and are thus plainly relevant to the commission’s allegations of the defendants tipping and trading on material nonpublic information,” Valerie Szczepanik, an SEC lawyer, said in her letter.
Rajaratnam, his hedge-fund firm and 14 other individuals are defendants in a civil insider-trading case brought by the SEC. Prosecutors have alleged that Rajaratnam was at the center of a massive insider-trading ring that generated millions of dollars in improper trades.
Sri Lankan born Rajaratnam and his Galleon funds held substantial shareholdings in several Sri Lankan blue chips, out of most he sold subsequent to the alleged insider trading scam. He still holds around 6 percent of Sri Lanka’s premier blue chip, John Keells Holdings under his personal portfolio.