14 Charged In Insider Trading Case

U.S. authorities have filed criminal charges against 14 peopleallegedly involved in a widening insider trading scandal that hasalready snared one of the richest men in America.

Federal authoritiesfiled fraud and conspiracy charges against lawyers and investment fundmanagers and others accused of illegally profiting from the use ofinside information.

Preet Bharara, announces charges against 14 individuals accused of insider trading, during a press conference in New York, 05 Nov 2009U.S. Attorney Preet Bharara said it was awakeup call for Wall Street. At Thursday's news conference Bhararasaid the alarm bells were getting louder.

"The ethical and legaljudgments of these defendants were flatly wrong," he said. "Theyweren't close calls, they weren't nuanced, this is not a grey area. These men and women have obligations to their employers, their clientsand our markets. And they disregarded those obligations in favor ofpersonal greed."

The U.S. Attorney said communication andtraining amongst the defendants was carried out using throw-away phonesand techniques employed by drug dealers. He described how one of thosearrested, Zvi Goffer, accused of operating of an insider trainingnetwork, disposed of his phone.  

"After the insider tradingwas complete, Goffer destroyed the disposable cell phone by removingthe SIM card, biting it, and breaking the phone in two," he said. "Hethrew away half the phone and gave the other half to his tippee tothrow away."  

The U.S. Attorney had a warning for insider traders.

"Thereare certain moral truths that are self-evident," said Bharara. "Andthere should be a moment, hopefully before you are holding a bag ofcash, delivered to you by somebody named Octopussy, that causes anyonein a position to tip or trade inside information to think twice beforetaking such a misguided step."

Today's action was a jointeffort of the U.S. Attorney's office, the FBI and the Securities andExchange Commission. Last month, authorities filed related chargesagainst several others including one of the richest men in the UnitedStates, Raj Rajaratnam, the operator of an large investment company.