Last updated: February 11, 2011 2:02 am

Rajaratnam seeks exclusion of wiretap evidence

Raj Rajaratnam, co-founder of the Galleon Group hedge fund accused of insider trading, on Thursday asked a US judge to exclude wiretaps from a co-operating witness who prosecutors acknowledged gave false information during the recorded conversations.

The conversations took place in 2009 between Mr Rajaratnam and Ali Far, who had previously worked as a portfolio manager for Spherix Capital. Mr Far pleaded guilty in October 2009 to insider trading charges and was working with US authorities in the case against Mr Rajaratnam.

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Prosecutors wrote in a letter to Mr Rajaratnam’s lawyers on Wednesday that in three separate conversations Mr Far had passed along fabricated information.

In January 2009, Mr Far told Mr Rajaratnam that he had spoken with a Cisco insider to gather information about the company, but actually had gleaned the information from analyst reports.

He also falsely claimed to have a “manufacturing guy” at Synaptics who gave him information about shipments and said he had a “buddy” at Intel, when he did not.

“The government should not be permitted to present evidence in at trial of statements involving information allegedly conveyed to Mr Rajaratnam concerning a particular stock where the information was fabricated or incorrect,” Mr Rajaratnam’s attorneys wrote in a court filing.

They argued that Mr Rajaratnam could not be conspiring to engage in insider trading if the person he was allegedly dealing with was passing on false information.

The request by Mr Rajaratnam comes after prosecutors signalled last month that they may not call Roomy Khan, another key co-operating witness to testify at the trial.

Separately on Thursday, US District Judge Richard Holwell said that the Galleon trial, which was set to begin on February 28, would be delayed until March 8. He gave no explanation for the change.

An attorney for Mr Far could not be reached for comment and a spokesman for Mr Rajaratnam had no comment.

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