Big New York Insider Trading Probe Spawns Another

The current case is largely an extension of work that led to the arrest of Galleon Group founder Raj Rajaratnam in October 2009. The Galleon investigation marked the first time that federal authorities used wiretaps in an insider trading probe.

Similarly, wiretaps led to the first arrest in the latest case. Don Ching Trang Chu, a consulting firm executive, was arrested Wednesday for allegedly providing private information about a company’s corporate earnings to a hedge fund.

The FBI this week searched the offices of three hedge funds and subpoenaed some of Wall Street’s most influential firms, including Janus Capital Group and SAC Capital.

The Galleon case has resulted in 23 arrests and 14 guilty pleas. Many of those arrested are cooperating in the latest investigation.
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