Judge ponders wiretaps in Rajaratnam insider trading case

The insider trading case of Raj Rajaratnam (Raj Rajaratnam news) seems to have arrived at a pivotal moment. A federal judge is considering whether the prosecution can rely on evidenced gleaned from wiretaps.

The use of wiretaps in this case was notable because it had never been used before in a major insider trading investigation. Previously, it was reserved for mobsters and drug cases. Rajaratnam's counsel is arguing that Congress never intended wiretaps to be used in insider trading cases.

A lot is riding on the decision. Regulators have vowed to crack down on crime on Wall Street. If the judge rules that such evidence is not admissible, then the case against Rajaratnam and Danielle Chiesi gets that much weaker. The New York Post suggest the judge will likely side with the government on this. If they get the green light to use wiretaps, they will likely expand their use of the technique, which may prompt more hedge fund executives to shun their phones.

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