Charlie Gasparino of makes the case that Raj Rajaratnam might have a decent shot at winning on appeal, based o the manner in which the government obtained the wiretaps, an issue that’s been a potential pitfall for the government all day.
Federal Judge Richard Holwell said it was “particularly disturbing” that government prosecutors left out of application the past criminal records of one of the informants who was recorded providing Rajaratnum with insider tips.
And the judge didn’t stop there. Holwell called it a “glaring omission” for federal prosecutors to omit from the application the fact that Rajaratnam had been subject of a past investigation by the Securities and Exchange Commission, where he gave a deposition and generated documents and testimony from other witnesses.
The problem for the government, according to people close to the defence, is that in order to obtain a wiretap, prosecutors and agents in the FBI must show that they’ve exhausted other investigatory methods to make their case. Howell said by leaving out these details, there is a “substantial preliminary showing that the government recklessly or knowingly made a misleading statement or omission.”