MELISSA BLOCK, host:
And today's conviction is ringing alarm bells all over Wall Street.
NPR's Carrie Johnson reports that it's also sending a powerful message to prosecutors working on business fraud cases: use more wiretaps.
CARRIE JOHNSON: Until recently, investigators who put together criminal cases over insider trading and securities fraud followed a traditional approach.
Mr. ANDREW WEISSMANN (Partner, Jenner & Block LLP): And that meant doing it the old-fashioned way, which is through lots of documents and lots of interviews of witnesses.
JOHNSON: That's Andrew Weissmann. He investigated the downfall of Enron and led the taskforce that brought those executives to justice.
Weissmann said today's verdict in the big insider trading case has shined a light on a powerful new option for prosecutors: the wiretap. Secret recordings in the case let jurors listen in on how some people on Wall Street really operate.
Here's Harvey Pitt, a lawyer who's represented banks and bankers for decades.
Mr. HARVEY PITT (Lawyer): Nothing is more direct than listening to somebody, in his own words, incriminate himself and make it clear he knew exactly what he was doing.
JOHNSON: So whispered conversations the government played for the jury during the trial helped prosecutors demonstrate Rajaratnam's intent to break the law and, Pitt says, his close relationships with other defendants who pleaded guilty.
Mr. PITT: Pillow talk is supposed to be private, and when you make it public like this, you get these kinds of results.
JOHNSON: Results like a half-dozen guilty pleas from Rajaratnam's associates and today his conviction on 14 criminal charges.
The U.S. attorney New York who oversaw the case, Preet Bharara, has been giving speeches to business groups. He's warned them that prosecutors will leave no stone unturned in investigating corporate fraud. That means, he says, more wiretaps - once used only in drug and mob cases.
Getting permission to snoop on phone calls requires several layers of review and sometimes help from a snitch or a whistleblower.
Sol Wisenberg is a former federal prosecutor.
Mr. SOL WISENBERG (Former Federal Prosecutor): The hard part traditionally has been getting it up through the Department of Justice. It's got to go all the way up through very high layers in the Department of Justice, and typically, this has not been done in white-collar cases.
JOHNSON: But senior Justice Department officials, including the chief of the criminal division, have been encouraging prosecutors to explore more aggressive strategies ever since the insider trading scandal came to light.
There's another hurdle: convincing a federal judge to approve the wiretap. Prosecutors have to demonstrate two big things to the judge.
Professor JOHN COFFEE (Columbia University): If you can show first that there was no other reasonably available means of securing the evidence, and two, that you're making a minimally invasive use of them.
JOHNSON: That's John Coffee, a law professor at Columbia University. Coffee says there's another complication with wiretaps.
Prof. COFFEE: You have to understand the one great limitation of tapes. They are extraordinarily expensive. You have to have someone monitoring those tapes 24 hours a day.
JOHNSON: Monitoring to make sure that investigators stop recording when talk turns from stock trades to personal conversations between a husband and wife.
But the lesson of the Rajaratnam verdict may be that the benefits of wiretaps far outweigh the complications along the way, especially in major prosecutions.
Rajaratnam's lawyer says they'll appeal the jury verdict, and wouldn't you know, the only real issue on appeal will be the legality of those government wiretaps.
Carrie Johnson, NPR News, Washington.
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