SEC v. Rajaratnam

SEC v. Rajaratnam
Court	United States Court of Appeals for the Second Circuit
Full case name	Securities and Exchange Commission v. Raj Rajaratnam, Danielle Chiesi, Galleon Management, LP, Ali Hariri, Ali T. Far, Anil Kumar, Choo-Beng Lee, David Plate, Deep Shah, Far & Lee LLC, Gautham Shankar, Mark Kurland, New Castle Funds LLC, Rajiv Goel, Robert Moffat, Roomy Khan, S2 Capital Management, LP, Schottenfeld Group LLC, Spherix Capital LLC, Steven Fortuna, Zvi Goffer
Decided	September 29, 2010
Citation(s)	622 F.3d 159
Court membership
Judge(s) sitting	Raggi, Lynch, and Chin, Circuit Judges
Case opinions
The court held that while an order to compel the disclosure of wiretap communications is lawful, the district court exceeded its discretion in the current case because it failed to determine the legality of the wiretaps before issuing the order, and did not limit the disclosure to only relevant conversations.

SEC v. Rajaratnam, 622 F.3d 159 (2d Cir. 2010), is a United States Court of Appeals for the Second Circuit case in which defendants Raj Rajaratnam and Danielle Chiesi appealed a discovery order issued by a district court during a civil trial against them for insider trading filed by the Securities and Exchange Commission (SEC). The district court compelled the defendants to disclose to the SEC the contents of thousands of wiretapped conversations that were originally obtained by the United States Attorney's Office (USAO) and were turned over to the defendants during a separate criminal trial.

The Second Circuit court held that although it is lawful to order such a disclosure, and the SEC indeed had a right to access the conversations in preparation for the civil trial, the district court exceeded its discretion by failing to limit the disclosure to conversations relevant to the current case. Citing the significant privacy implications of such a disclosure, the Second Circuit court granted a writ to vacate the discovery order, and remanded the case back to the district court.^[1][2]