Lawyers for Galleon hedge fund founder Raj Rajaratnam objected on Tuesday to the government's request to schedule his criminal trial ahead of a parallel SEC case, saying the move could compromise the defense's case.

Having enjoyed the publicity of commencing its civil case prior to indicting its criminal case, the government should address their problems directly to the court, rather than attempt to manufacture the order of its trials solely in a manner that suits its strategic interests, attorney John Dowd said in a letter to U.S. District Judge Richard Holwell.

The government's own strategic charging deacons, criminal and civil, should not be permitted to compromise the defendants' ability to defend themselves fully against its allegations, the letter said.

The letter came one day after Rajaratnam and a co-defendant Danielle Chiesi pleaded innocent to securities fraud charges in what U.S. prosecutors describe as the biggest hedge fund insider trading case ever.

The government requested before Holwell that the trial begin in June or July, since a parallel U.S. Securities and Exchange Commission civil case is scheduled for August and potential witnesses would be less likely to testify openly at the SEC trial if the criminal case has not been resolved.

The SEC case will proceed before a different judge.

Holwell said he was not prepared to set a firm trial date, but added: That might wind up to be the schedule.

Dowd also said the government has rebuffed requests by the defense to produce as much as 100 hours of wiretap intercepts that are expected to make up a large part of the government's case against Rajaratnam and Chiesi

The defendants, without the benefit of discovery, including but not limited to the wiretap intercepts, are not in a position to assess whether a trial date as proposed by the government is realistic, Dowd said.

Prosecutors said on Monday that they expected to get the intercepts to the defense within a week.

Twenty-one people have been criminally or civilly charged in the insider trading case involving employees of companies including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp.

Prosecutors contend that Rajaratnam was at the center of that illegal information network. Chiesi is accused of supplying tips to Rajaratnam and of trading on the information.

The cases are USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-mj-2306 and USA v Danielle Chiesi et al No. 09-mj-2307.

(Reporting by Edith Honan; Editing by Steve Orlofsky)

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