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UPDATE 1-Chiesi in talks over some Galleon evidence issues

* US, Chiesi agree to adjourn hearing over evidence

* Chiesi lawyer says preparing for Tuesday wiretap hearing

NEW YORK, July 27 (Reuters) - Danielle Chiesi, a co-defendant in the Galleon Group insider trading case, is in talks with prosecutors about resolving some issues about evidence ahead of her trial, according to court papers filed on Tuesday.

U.S. Attorney Preet Bharara, in a court filing, asked to adjourn a July 29 hearing in connection with Chiesi’s motion to suppress statements she allegedly made the day criminal charges against her were announced.

“The government and Chiesi are discussing a possible resolution of the issues to be addressed at that hearing,” Bharara wrote in the court papers.

U.S. District Judge Richard Holwell in Manhattan approved the request by both sides to reschedule the hearing for early September, should it remain necessary.

The criminal case against Raj Rajaratnam, the founder of the Galleon Group hedge fund firm, and Chiesi, a former portfolio manager at New Castle Group LLC, was made public on Oct. 16, 2009. They have both pleaded not guilty, and are free on bail ahead of their October trial.

Alan Kaufman, a lawyer for Chiesi, said “both sides are working very hard” to prepare for a separate Tuesday afternoon hearing over whether wiretap evidence amassed by prosecutors can be used in the case.

The case is U.S. v. Rajaratnam et al, U.S. District Court, Southern District of New York, No. 09-01184. (Reporting by Jonathan Stempel; Editing by Tim Dobbyn)

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