Judy Woodruff speaks with a Financial Times reporter about 14 people facing insider-trading charges for allegedly netting $20 million in illegal profits.
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The world of hedge funds was rocked again today with new charges of insider trading. Fourteen people, including money managers, lawyers and investors, were singled out by federal prosecutors. Seven of the defendants allegedly offered tips on impending takeovers. Those tips, in turn, were passed on with pre-paid cell phones, fake names and secret meetings.
The latest charges are connected with the criminal case against billionaire and hedge fund manager Raj Rajaratnam, the founder of the Galleon Group fund, which is now being liquidated. He was among six hedge fund managers and corporate executives arrested on insider trading last month, allegedly reaping more than $20 million in illegal profits.
The U.S. attorney in Manhattan said today that the latest charges were a wakeup call to Wall Street.
PREET BHARARA, U.S. attorney, Southern District of New York: This investigation goes to the very heart of fair play in the business world. We are not just talking about aggressive hedge fund traders who are trying to get an edge. Someone had to give them that illegal edge. And it takes two to tango. As we allege in these complaints and the previous ones, those someones were unscrupulous insiders with connections to some of the best-known companies in the world. The casual betrayal of corporate secrets by insiders threatens the integrity of our markets and victimizes the companies they owed a duty to honestly represent.
And for more about these insider trading cases, we turn to Stacy-Marie Ishmael, a reporter and markets blogger for "The Financial Times." Thank you for joining us.
So, briefly, what is it that prosecutors did today?
STACY-MARIE ISHMAEL, "The Financial Times": Thanks for having me. Well, what happened this morning is that there were a series of new charges filed by the FBI and the Department of Justice against some characters that hadn't previously been named in this case. There were also eight arrests. Seven of those were in New York, and one of them was on the West Coast.