Lawyers Fight Tape Recordings in Futures Probe

A federal judge is being asked to declare illegal many of the secret tape recordings made by undercover FBI agents during a two-year probe of suspected fraud at the world’s two largest futures exchanges, according to published reports.

The Chicago Sun-Times and the Chicago Tribune reported during the weekend that lawyers representing commodity traders are contending that their clients should not be forced to hand over documents or appear before a federal grand jury because evidence against the traders came from improper recordings.

U.S. Attorney Anton Valukas and the FBI’s Chicago office have declined to confirm that an investigation is ongoing into allegedly fraudulent trading practices at the Chicago Mercantile Exchange and the Chicago Board of Trade.

But traders who have been subpoenaed and their attorneys have disclosed some aspects of the investigation.

Several defense attorneys said in letters to government prosecutors and in closed-door arguments before Chief U.S. District Judge John Grady that many of the tape recordings made by FBI agents amount to unauthorized wiretaps, the newspapers reported.

While at least two lawyers identified by the Sun-Times declined to confirm the filings, that newspaper and the Tribune quoted unidentified sources as saying the motions were made in the last two weeks.

The lawyers argue that FBI agents who posed as traders could only legally tape conversations in which they participated, and conversations in which the agents participated have not been challenged, the newspapers said.