Galleon Group

This week the US District Judge Richard Holwell approved the use by prosecutors of wiretaps to investigate a fraudulent insider trading scheme supported by Galleon Group hedge fund founder Raj Rajaratnam. While the ruling does not specifically authorize wiretaps to investigate insider trading alone, it marks great victory for prosecutors who now can access secretly recorded conversations.

The US prosecutors will be able to widen the Galleon Group insider-trading case to investigate into hedge funds that had not been previously implicated according to the sources familiar with the situation. The Wall Street Journal reports that a hedge-fund manager referred to as "Tipper X" will assist in the Galleon Group case.

"Tipper X" was identified as Thomas Hardin, a former trader at Lanexa Global Management, the newspaper said. Separately, New Your Times also identified the 32-year-old Hardin as "Tipper X."

 Raj Rajaratnam, Galleon Group hedge fund founder, who was accused by the US federal prosecutors of generating millions of dollars of illegal profits, filed a complaint against the U.S. Securities and Exchange Commission saying the regulator violated his constitutional rights by wiretapping his phone calls.

 Federal prosecutors in Manhattan are filing charges against 14 people that are allegedly accused of another insider trading scheme that involved hedge fund managers, top Silicon Valley executives and a group of white-shoe advisers. Complaints were filed against nine individuals and it is unclear if there is any connection with the previous complaints filed three weeks ago against Raj Rajaratnam, the founder of hedge fund Galleon Group, and Danielle Chiesi, an employee at the New Castle Group hedge fund.