FBI Makes More Wall Street Corruption Arrests in Insider Trading Probe

U.S. Attorney Preet Bharara has called the problem of insider trading "rampant."

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    NEWSLETTERS

    NBCNewYork
    A suspect is taken into custody in connection with the insider trading investigation.

    The FBI has made another round of arrests of Wall Street traders as part of an ongoing corruption probe that authorities have considered one of the most extensive insider trading investigations in history.  

    Those arrested include a hedge fund co-founder, a hedge fund portfolio manager, four financial analysts and a Dell Inc. employee, officials said.

    Four are charged with securities fraud and conspiracy to commit securities fraud, among other charges. Three have already pleaded guilty and are cooperating.

    Anthony Chiasson, a co-founder at former hedge fund group Level Global Investors LP, was among three men arrested early Wednesday. He surrendered to the FBI.

    In a statement, Chiasson's attorney Scott Morvillo said his client "categorically denies having done anything improper over the course of his 16-year career in the securities industry and intends to vigorously contest these baseless charges in court. He is looking forward to being vindicated at trial."

    The arrests are part of the FBI's ongoing investigation into insider trading in the hedge fund industry, dubbed "Perfect Hedge." 

    U.S. Attorney Preet Bharara said the seven investment professionals participated in an insider trading scheme that allegedly netted more than $61.8 million in illegal profits based on trades of a single stock.

    Messages seeking comment from lawyers for the defendants were not immediately returned.

    More than 60 Wall Street brokers and traders have been charged in the probe thus far, including convicted hedge fund billionaire Raj Rajaratnam, who was sentenced last fall to 11 years in prison.    

    The FBI has been using wiretaps on traders' phone conversations as part of the insider trading probe -- a problem Bharara has described as "rampant."

    “This initiative is far from over," said Assistant FBI Director Janice K. Fedarcyk. "If you are engaged in insider trading, what distinguishes you from the dozens who have been charged is not that you haven’t been caught; it’s that you haven’t been caught yet.”

    The insider trading probe is unrelated to the housing and financial crises where, to date, no Wall Street or ratings agency executive has faced criminal charges.