Via Reuters.
Perhaps lower profile funds are big enough catches on their own. One known target was Galleon Group, whose founder Raj Rajaratnam was charged more than a year ago with insider trading. Others could be the likes of Diamondback Capital Management and Level Global Investors, two Connecticut funds run by SAC alumni and raided by the FBI last month — though neither has been accused of anything, and they are among many funds, including SAC, who have received requests for information.
It might even be that Bharara fancies changing the way financial business is done, in much the same way former New York Attorney General Eliot Spitzer did with bank research. The use of expert networks may be standard practice these days but it isn’t hard to make it look bad, especially when it involves current employees of the companies being researched. It would, however, be much tougher to make the broader case that piecing together a picture from disparate nuggets of legally-obtained information is shady.
Whether eventually proven to have broken the law or not, the arrested tech experts may now be wishing they’d looked more skeptically at their consulting windfalls. Hedge fund managers may be relieved it wasn’t their turn this time — but they should remember that the best fishermen are usually very patient people.
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