Raj Rajaratnam, the billionaire founder of Galleon Group, on Tuesday rejected federal insider trading charges, and accused the government of violating his constitutional rights with its use of wiretaps.

Rajaratnam denied allegations in a U.S. Securities and Exchange Commission complaint that he conducted insider trading in securities of Advanced Micro Devices Inc , Akamai Technologies Inc , Clearwire Corp , Google Inc , Hilton Hotels Corp, Intel Corp , PeopleSupport Inc and Polycom Inc

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He said he did not provide benefits to anyone in exchange for any alleged insider information, and that research by Galleon analysts was more detailed and precise than any inside information he was alleged to obtain illegally.

In his answer to the SEC civil complaint, Rajaratnam also accused the government of violating his constitutional and statutory rights through unprecedented use of electronic surveillance.

He said that when the government sought court approval to use wiretaps, it failed to reveal that it had interviewed him under oath and taken tens of thousands of pages of Galleon documents.

Rajaratnam said the government also misrepresented that cooperating witness Roomy Khan had not yet been charged with any crimes when she had been convicted of wire fraud in 2001.

The SEC did not immediately return requests for comment. A lawyer for Khan also did not immediately return a call.

Rajaratnam, a Sri Lanka native, is the most prominent defendant in what has become the biggest U.S. hedge fund insider trading case in history.

Some 20 defendants face criminal charges, civil charges or both. Prosecutors have identified $40 million of illegal profits, and the SEC has found $53 million in its own probe. Rajaratnam also faces criminal charges

The case is SEC v. Galleon Management LP et al, U.S. District Court, Southern District of New York, No. 09-8811.

(Reporting by Jonathan Stempel, editing by Dave Zimmerman)

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