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12 Feb 2010

Galleon Hedge Fund Case Wins Temporary Reprieve

HedgeCo News - Hedge fund founder Raj Rajaratnam won an emergency order relieving him from having to turn over wiretap recordings in the SEC v Galleon case, according to a Reuters report.

Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC was seeking it from Rajaratnam and his co-defendant, Danielle Chiesi.

Rajaratnam’s lawyer last month attacked the U.S. government’s wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid.

The temporary stay was granted late yesterday by U.S. Court of Appeals, Reuters said. The reprieve came just two days after a U.S. District Court Judge ordered the deadline of Feb. 15 for Rajaratnam and Chiesi to surrender the recordings to the SEC.

Rajaratnam and Chiesi are being accused of insider trading and securities fraud, enabling the pair to generate $49 million in profit.

Reuters says the majority of the stocks are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.

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