Missteps in Federal Use of Wiretaps in Insider-Trading Case


The wiretaps of conversations between Raj Rajaratnam, Galleon Group hedge fund manager, and his sources of information appear to provide powerful evidence that he traded on illegal insider tips, writes Peter Henning in the New York Times. The jury in the insider trading trial can hear what was actually said rather than relying on the sometimes-fuzzy recollections of witnesses.

Missteps in how federal prosecutors obtained and monitored the wiretaps and tried to entice people into making incriminating statements have come to light, raising questions about how carefully the Justice Department has been in applying these tactics in white-collar crime cases says Henning. These should serve as a warning that wiretaps must be used very carefully in future cases.

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