Under Investigation For Financial Crimes? Feds May Be Listening

By KevinMarcilliat, In White Collar Crimes, 0 Comments

Wiretaps aren’t just being used to investigate violent crimes, organized crime and drug offenses anymore. Consider the recent insider trading case of Raj Rajaratnam of the Galleon Group: an investigation by the Securities and Exchange Commission over the course of two or three years did not yield enough information to hold Rajaratnam accountable for insider trading, however, 2000 recordings collected over a year-long wiretap of his cell revealed an extensive network of insider trading that could finally be prosecuted.

In October of 2009, Rajaratnam and five others were criminally charged with white collar crimes, including insider trading and conspiracy, based likely in large part on the use of information obtained through wiretaps.

The advantage gained by the Feds from using wiretaps may best be evidenced by the dramatic increase in SEC-lead insider trading investigations over the last three years that eclipses any other three-year-period in the SEC’s enforcement history. Seventy convictions on criminal white collar or financial fraud crimes have also been obtained through the use of wiretap evidence.

These successes signal a trend of prosecutors and enforcement agencies toward the use of wiretaps in gathering information against individuals suspected of white collar crimes. Remember, these wiretaps are happening before charges are filed, even before a person may even be aware that he or she is under investigation for a federal crime, so be aware that whatever you are saying on your Iphone, Blackberry or other mobile device, law enforcement may be listening in and recording your conversation.

As for Rajaratnam, he is appealing the use of the wiretaps to convict him of insider trading and conspiracy. The outcome remains to be seen as to whether he will be successful on appeal and whether the judiciary will place new restrictions on the use of wiretaps as an investigatory tool.

Source: Forbes, “Once Reserved For Drug Crimes, Wiretapping Takes Center Stage in White Collar Prosecutions,” Jordan Maglich, May 21, 2013