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US prosecutors charge 14 in widening insider trading scandal
Nov 5, 2009, 16:44 GMT
New York - The United States has charged 14 more people as part of a widening crackdown on insider trading on Wall Street, prosecutors announced Thursday.
A total of 20 top hedge fund managers and their accomplices have now been charged for allegedly running illegal insider trading schemes that earned them 40 million dollars.
US state attorney Preet Bharara likened the white-collar crime to mafia practices and said it spread far beyond the 20 arrests. The hedge fund managers had help from people within US companies that could provide them with non-public developments.
The bombshell was first dropped three weeks ago with the arrest of Sri Lankan billionaire investor Raj Rajaratnam. He was charged along with five others including former directors at a Bear Stearns hedge fund and executives from IBM and Intel Corp.
The scandal 'makes a mockery of our system,' Bharara said in a press conference from New York. 'This investigation goes to the very heart of fair play in the business world.'
Bharara suggested insider trading could be far more widespread on Wall Street than these initial arrests suggest. Federal investigators have resorted to wire-tapping businessmen to collect evidence, resorting to tactics usually reserved for drug and mafia crimes.
'Is this just the tip of the iceberg? We don't have an answer yet, but we aim to find out,' he said.
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