Transcripts

The Feds Announce More Insider Trading Arrests

SUSIE GHARIB: One of the biggest insider trading cases in years got even bigger today. Federal prosecutors filed criminal charges against 14 investment professionals, including a former Moody's analyst, an executive at Atheros Communications and the founder of Incremental Capital. Those firms had no comment. Today's arrests are an expansion of the investigation into Galleon Group, a major New York hedge fund. Prosecutors say the alleged ringleader is a former Galleon employee and the fraud he helped commit netted $20 million in improper profits. The SEC's enforcement director says the suspects had access to inside information and didn't hesitate to use it.

ROB KHUZAMI, SEC ENFORCEMENT DIRECTOR: We expose today the apparent ease with which Wall Street professionals, corporate insiders, analysts and lawyers disregarded the rules and their duties to clients and shareholders for kickbacks and easy payoffs. Their misconduct threatens to undermine the confidence upon which our capital markets depend. We take that threat very seriously.

GHARIB: So far, five people have pleaded guilty. Among them, hedge fund managers in Massachusetts and California, along with the witness at the center of the case against Galleon founder Raj Rajaratnam.