by UNCENSORED NEWS
| November 26, 2010 at 03:16 pm
The latest in a wrap-up of insider trading busts indicate that the big reason these arrests were made is because the police were able to use wiretaps to find out information. FBI searched three hedge fund offices and subpoenaed Wall Street firms, Janus Capital Group and SAC Capital in hopes of finding information clarifying the guilt of suspected employees being rounded up in an insider trading probe. "The Wall Street Journal is reporting that federal agents arrested an executive of a California "export network" firm on Wednesday for insider trading. The exec, Don Ching Trang Chu, was arrested before a trip to Taiwan he had scheduled for Sunday. Chu was listed earlier this week as an Asia expert on the website of company Primary Global Research, LLC. According to prosecutors, Chu had the firm's consultants provide inside information about earnings releases for publicly traded companies. This case is the latest in a series of probes into insider trading federal authorities are conducting on hedge fund and mutual fund firms as well as Wall Street execs." This marks the second of insider trading cases that began last year with the indictment of Raj Rajaratnam, founder of the Galleon Corporation. The Galleon investigation marked the first time wiretaps were ever used in an insider trading case. Rajaratnam was indicted in October 2009 which has led to 23 arrests and 14 guilty pleas. Authorities have not given out much information in this current investigation, although it is anticipated that it could be even bigger than the Galleon case. "The crackdown on insider trading has been a boost for the pocketbooks of white-collar defense attorneys," said Eric Snyder, a former federal prosecutor. He was talking at a function in Manhattan for approximately 1000 of the top defense lawyers in the country this past week. "Everybody was talking about how they're going to get a piece of it," he said of the arrests expected to result from the latest probe. "Every firm in the city is expecting they're going to become involved in that case."
The wiretaps on a hedge fund phone were cited in a criminal complaint filed in U.S. District Court in Manhattan, where a judge on Wednesday upheld the government's right to use wiretaps. The judge rejected defense contentions that they were unconstitutional because they were not specifically authorized under rules written by Congress regarding wiretaps.