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FBI arrests seven in insider trading scheme

The FBI arrested seven people on Wednesday in the same probe that took down Raj Rajaratnam.

Fbi insider trading probeEnlarge
The FBI arrested seven people on Wednesday in the insider trading probe that brought down Raj Rajaratnam. (Mario Tama/AFP/Getty Images)

Federal authorities charged seven people in an insider trading scheme, directly involving some of Wall Street’s most prominent money managers, the Wall Street Journal reported.

The FBI announced the charges on Wednesday, after arresting four people in New York, Boston and California, and three others were also charged. The scheme allegedly netted more than $61.8 million in illegal profits based on trades of a single stock, CNBC reported.

Read more at GlobalPost: Raj Rajartnam gets 11 years in prison

The arrests come from the government’s four-year investigation into the alleged sharing of confidential information on publicly traded corporations in the hedge fund industry, Reuters reported. Raj Rajaratnam, one-time billionaire and hedge fund tycoon, was convicted of insider trading through this probe. He is now serving a term of 11 years in prison.

Read more at GlobalPost: Ex-Goldman Sachs directors indicted for insider trading

In Boston, the FBI arrested Todd Newman, a former portfolio manager who oversaw technology investments for Diamondback Capital Management, a hedge-fund firm. They also arrested Jon Horvath, a technology analyst with Sigma Capital Management, in Manhattan and Anthony Chiasson, a former hedge-fund manager at Level Global Investors LP surrendered to the FBI in New York, the WSJ reported. Danny Kuo, a vice president and technology fund manager of Whittier Trust Co., was also arrested in South Pasadena, California.

Both Chiasson and Newman were charged with one count of conspiracy to commit securities fraud, among other charges, in Manhattan’s US District Court, Reuters reported.

Charges against the three others arrested are said to be announced on Wednesday, at a press conference in Manhattan.

Read more at GlobalPost: Fall of the Raj: Galleon billionaire convicted

http://www.globalpost.com/dispatch/news/regions/americas/united-states/120118/fbi-arrests-seven-insider-trading-scheme