Wiretaps of hundreds of conversations have led federal authorities to pursue charges against individuals at two well-known hedge funds and an established mutual fund that caters to ordinary retail investors. The targets are former traders at hedge funds Diamondback Capital management LLC and Level Global Investors LP, and an analyst at mutual fund company Neuberger Berman Group LLC. If charges are brought, they would represent a substantial expansion of the insider trading investigations underway. Word is that two former research analysts at Level Global and Diamondback are cooperating with authorities. (“More Charges Set for Insider Probe,” Wall Street Journal).
The investigation has so far resulted in criminal cases being filed against individuals at an “expert network” firm named Primary Global Research LLC. The individuals allegedly tipped others to corporate earnings and other material information prior to public announcements. One of the firm’s founders, Anthony Chiasson, is reportedly a target of investigators.
Citing an email written by a former Primary Global sales manager, the article reports that Primary Global received $210,000 from Level Global and $165,000 from Diamondback for a year of access to information supplied by its “expert network.”
Prosecuting insider trading cases has been identified by regulators and prosecutors as a top priority. It certainly appears that there is a crackdown in that area. Since 2009, federal authorities have charged 56 individuals in insider trading cases, and 52 of them have either pleaded guilty or been convicted. The conviction of Galleon Group founder Raj Rajaratnam in particular has “shaken Wall Street,” according to the article.
Page Perry is an Atlanta-based law firm with over 150 years collective experience protecting investor rights and fighting Wall Street greed.