Galleon hedge fund founder Raj Rajaratnam, facing criminal and civil charges in a multimillion dollar insider-trading probe, filed a notice of appeal against a U.S. judge's order that he turn over wiretap evidence in the civil case.

U.S. District Court Judge Jed Rakoff on Tuesday ordered Rajaratnam and a co-defendant, Danielle Chiesi, to surrender confidential recordings to the U.S. Securities and Exchange Commission by February 15.

The SEC sued Galleon and a score of individuals and funds for civil fraud on the heels of a criminal prosecution last October.

Lawyers for Rajaratnam, 52, and Chiesi, 44, a former employee of New Castle Funds LLC, said in court documents they were asking the appeals court for an emergency stay of Rakoff's order after the judge denied their motion to suspend it.

The pair were arrested in October and indicted in December on charges of securities fraud and conspiracy in what prosecutors have described as the biggest hedge fund insider-trading case in the United States.

The case expanded in November and ultimately more than 20 traders, lawyers and executives were criminally or civilly charged; some of them employees of well-known U.S. companies such as: IBM Corp , McKinsey & Co management consultants and Intel Capital, an investment arm of Intel Corp

Thousands of wiretaps were made in the criminal probe between 2003 and 2009 involving Wall Street and Silicon Valley firms, but defense lawyers and the SEC have been tussling over their use in the parallel civil fraud case.

Rajaratnam's lawyers said in a brief to the appeals court that Rakoff's order contravenes the plain text of the wiretap statute and disregards strict limitations and privacy protections that the law provides.

A superseding indictment filed on Tuesday consolidated the charges against Rajaratnam and Chiesi after a series of guilty pleas by some of their friends and associates. In all, nine of the accused have pleaded guilty and eight of those are cooperating with investigators.

The pair are accused of making up to $49 million in illegal profits after using tips from insiders to trade on mostly tech stocks.

The stocks included: Intel Corp , International Business Machines Corp , Akamai Technologies Inc , Polycom Inc

, Hilton Hotels Corp , Google Inc , Sun Microsystems Inc , Clearwire Corp , Advanced Micro Devices , ATI Technologies Inc and eBay Inc Inc.

The appeal notice was filed with the U.S. Court of Appeals for the 2nd Circuit in New York.

The case is SEC v Galleon Management et al, U.S. District Court for the Southern District of New York, No. 09-08811.

(Reporting by Grant McCool, editing by Leslie Gevirtz)

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