As the government shifts its focus in the wake of the financial crisis from corporations to individuals, it brings with it a new investigatory tool previously reserved for organized crime and narcotics prosecutions: wiretaps.
Though insider trading is not a specified offense authorized by Title III, the government argues it can “incidentally happen upon” insider trading while investigating another lawfully specified offense. So far, the only time the government has used wiretaps for insider trading is in the Galleon Group litigation, where the legality of the wiretaps is still pending. The government, however, has been very vocal that it will continue to employ wiretaps in this area. This article addresses some of the consequent privacy concerns that resulted from the government using wiretaps against individuals in insider trading. The severity of the government’s missteps, and clear violation of defendants’ privacy rights, will hopefully urge increased judicial oversight, and a Congressional response deciding whether the government’s “new tool” is appropriate in this context. Until then, it seems ominous that while the judiciary was harsh in its verbal sanctioning, it has allowed the government to proceed despite clear “reckless disregard for the truth” and flagrant violations of individual privacy rights.
Read the full article HERE.