Criminal charges have been filed against 14 people, including attorneys and Wall Street professionals, in a widening $53 million insider trading case that has already snared one of the richest men in America, federal prosecutors said today.
The actions raise to 20 the number of people who have been charged in the case first disclosed last month with the arrests of Galleon Group founder and hedge fund operator Raj Rajaratnam and five others.
At the time, U.S. Attorney Preet Bharara called the first arrests “a wakeup call for Wall Street.”
“Today the alarm bells have only grown louder,” he said at a news conference Thursday.
Bharara said that total profits alleged by prosecutors was $40 million while the Securities and Exchange Commission raised the total to $53 million, saying it includes millions in profits not described in the criminal complaints.
He said he knew people would ask if the insider trading case was the tip of the iceberg of illicit trading on Wall Street.
“We don’t have an answer to that but we aim to find out,” he said.
He said eight people were arrested today on securities fraud charges and another five have already pleaded guilty are cooperating. Another person is still at large, he said.
A bail hearing for Rajaratnam, who is free on $100 million bail and has been listed among the nation’s richest people, was scheduled for later today.
Rajaratnam has denied through his lawyer participating in the scheme to use inside information to trade stocks at a profit ahead of public announcements. (AP)
