UPDATE 2-More targets, cooperators in Galleon insider case

* U.S. prosecutors expect more charges in the case

* Investigators say they have more cooperating witnesses

* U.S. asks judge to deny Rajaratnam bail requests

* Trial of civil case set for next August (Recasts to add U.S. prosecutors cite cooperators, request denial of Rajaratnam bail, defense letter on wire taps)

By Grant McCool

NEW YORK, Nov 4 (Reuters) - Investigators expect more people to be charged in the Galleon hedge fund insider trading case, and they said they have cooperating witnesses to strengthen their case against the fund's billionaire founder Raj Rajaratnam.

In statements at a court hearing and in briefs on Wednesday in parallel federal civil and criminal cases, the government signaled publicly for the first time since Rajaratnam and five others were arrested on Oct. 16 that its net was widening.

"There is a real possibility that we will be adding additional parties," U.S. Securities and Exchange Commission lawyer Valerie Ann Szczepanik said in a Manhattan court hearing in the civil case. "We can't comment on the timing."

Federal prosecutors have described the case as the biggest-ever hedge fund insider-trading scandal, involving executives of some well-known U.S. companies, including Intel Corp's (INTC.O: Quote, Profile, Research) venture capital arm, International Business Machines (IBM.N: Quote, Profile, Research) and McKinsey & Co management consultants.