Although the “pioneering nature”1 of the use of wiretaps in the insider trading case of United States v. Rajaratnam2 has received a great deal of media attention, the statutory prerequisites to wiretapping have received little prior close legal scrutiny in white-collar cases. Of particular note is the “necessity” requirement, which is intended to limit the use of wiretaps by requiring the government to demonstrate that no reasonable alternative investigative techniques will suffice. This element could provide a fertile area to limit unwarranted expansion of wiretapping in the investigation of business cases.
In the Rajaratnam appeal, the defense argument on necessity focuses on the government’s virtual failure to mention in its initial wiretap application a multi-year and very active Securities and Exchange Commission investigation of the same conduct, the rich fruits of which the SEC had fully shared with criminal investigators. The government can simply avoid this problem in the future by including in its wiretap applications information regarding parallel efforts of regulatory agencies like the SEC.
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