It was never a secret that Raj Rajaratnam's legal team would appeal his insider trading guilty verdict based on its view that the wiretap evidence used against him in court was illegitimate.

The twist here is that the defense is now suggesting that the substance of their argument is so strong that he should remain out of jail, pending a resolution of the upcoming appeal. The prosecution of course will argue that Rajaratnam poses a flight risk, given his wealth and ties to Sri Lanka.

My guess is that this 11^th hour attempt to keep Rajaratnam out of prison will fail. What strikes me as less clear is how strong his case is that the wiretap evidence shouldn't have been allowed. Rajaratnam's team had previously argued that the wiretap evidence was not admissible because government investigators botched their application, omitting that they had been building a conventional case against Rajaratnam. That would have made wiretaps less likely to have been approved, as other investigative means had not been exhausted.

Is this argument compelling? We'll have to wait and see what the judge panel thinks. There is a lot riding on this, to be sure. To date, Rajaratnam represents the U.S. Attorney's greatest insider trading victory. It will be much harder to prevail at a retrial without the wiretap evidence.  

For more:
- here's the article in Crain's

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