Reuters first to reveal major legal setback for central figure in U.S. hedge fund insider trading probe

Reuters was first to report a major legal setback for Galleon Group founder Raj Rajaratnam, the central figure in the U.S. governments expanding investigation into insider trading. A U.S. District Judge denied Rajaratnams motion to suppress evidence obtained by wiretap, and including thousands of conversations. The case is the first time the government has used wiretaps, typically used in organized crime and drug investigations, in a criminal insider trading case. The Nov. 24 ruling was a boon for prosecutors expected to bring more criminal cases in the hedge fund insider trading investigation in the coming weeks, and may further change how hedge funds, traders and associated firms do business. It is also a big setback for Rajaratnam, and lawyers not involved in the case said the ruling may prompt the onetime billionaire to settle rather than risk a conviction and bigger punishment at trial. Reuters reported the judge`s ruling less than 5-1/2 minutes after it was issued. Bloomberg was more than four minutes behind Reuters, citing CNBC, while Dow Jones reported the news six minutes after Reuters, also citing CNBC.