In the age of e-discovery, it’s been drilled into business executives’ heads that you shouldn’t put anything in an e-mail that you don’t want to see on Page 1. Now, in light of developments in the Galleon Group insider trading case, the next edict might be to avoid feeding the headlines with something you say on the phone.
The case marks the first time the federal government has used wiretaps in an insider trading case.
“There may be other times where it was used, but the case never came to light so we don’t know about it,” said former Assistant U.S. Attorney Eugene Illovsky.
Illovsky, now a partner in Morrison & Foerster LLP’s Palo Alto office, represents clients managing crises and those interacting with government investigatory, enforcement and prosecutorial authorities.
“The use of wiretaps in this case certainly signals on behalf of the Department of Justice a more aggressive approach to attracting securities fraud violations,” Illovsky said.
Another attorney, speaking on the condition of anonymity, said it’s uncommon to have wiretap evidence in securities fraud investigations because regulators typically only become aware of potential insider trading after the fact.
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Source: sanjose.bizjournals.com
By: William-Arthur Haynes
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