Federal Judge Richard Sullivan in Manhattan today ruled that Federal prosecutors can use secretly recorded telephone conversations of ex-Galleon Group employee Zvi Goffer and others in the insider-trading case that apparently launched the fed's current investigation.  Just last month, another judge ruled that prosecutors can use recordings of thousands of conversations by Galleon founder Raj Rajaratnam in his separate criminal trial.  Mr. Rajaratnam has denied wrongdoing.

Judge Sullivan noted that the defendants in the case had not made a persuasive argument - they had argued in part that the wiretap applications in their case misrepresented the need for the secret recordings by federal agents.  All told, prosecutors turned over more than 5,800 wiretapped telephone calls in the Goffer case.

The judge did, however, express concern that some of the wiretaps included portions of telephone calls between Craig Drimal, a co-defendant, and his wife, as well as calls between Mr. Goffer and his wife.  The judge reserved decision on whether to suppress those calls and gave the defendants time to file additional papers.

Mr. Goffer, a former Galleon employee and the founder of Incremental Capital, is among a group of 6 defendants charged in a 2nd alleged insider-trading ring uncovered as part of the Galleon probe.  Mr. Goffer and the other defendants have denied wrongdoing.  The case will go to trial on 5/9/11.   

 Overall, 24 people have been charged criminally in a broad probe into insider trading on Wall Street - 14 have pleaded guilty.    [WSJournal, 1/5/11]