In what has been referred to as a “tactical sea change in pursuit of financial malefactors,”1 the federal government has begun to employ investigative techniques typically associated with organized crime and drug cases. To date, 23 arrests have been made in the Galleon Group case, described by the U.S. Attorney for the Southern District of New York, Preet Bharara, as the “largest hedge fund insider trading case ever charged, criminally” and “the first time that court-authorized wiretaps have been used to target significant insider trading on Wall Street.”2
Although the Galleon Group case may be the first insider trading case to rely on wiretaps, it is not the first white-collar case to be premised in large part on the use of wiretaps and other undercover investigative techniques.3 The recent cases involving hedge fund use of experts also appear to be premised, in part, on wiretapping. Lanny Breuer, Assistant Attorney General for the Criminal Division of the Department of Justice, has heralded a “new chapter” in white-collar criminal enforcement which includes the aggressive use of all such tools.4 This article provides an overview of federal wiretap law and the defense issues that surface with its use.
Wiretap Law
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