At Center Of Insider Case: 'The Octopussy'

Forbes ^ | 11/5/2009 | Liz Moyer

[bruinbirdman]

Charges against 14 snared in insider-trading probe make for unusually entertaining reading.

The insider-trading case outlined by federal prosecutors in New York Thursday has all the elements of a classic television crime drama: wiretaps, clandestine cash handoffs and people with nicknames like "the Greek" and "octopussy."

Authorities say a trader known as "the octopussy" is at the center of the ring, which included other traders, a Moody's Investors Service analyst, and hedge fund managers, and two lawyers, one of whom was a young associate who allegedly passed along tips about private-equity deals being done by his big law firm's clients.

In all, 14 traders, lawyers and hedge fund executives were charged with conspiracy and securities fraud. Five of those defendants have already pleaded guilty. The latest charges appear linked to a case last month involving the arrest of six traders and corporate executives, including the billionaire hedge fund manager Raj Rajaratnam of Galleon Group.

"When we announced our first arrests three weeks ago, I said this case should be a wake-up call for Wall Street," said U.S. Attorney Preet Bharara on Thursday. "Today the alarm bells have only grown louder."

In their investigation, authorities used sophisticated data mining and electronic surveillance tactics that are normally reserved for the pursuit of gangsters and drug traffickers. Former federal prosecutors said Thursday the use of wiretaps in particular indicated law enforcement may be making an even more concerted effort to root out white-collar crime on Wall Street.

Wiretaps are "the nuclear weapon" of a federal prosecutor, says Robert Mintz, a former U.S. attorney in New Jersey and now head of the white-collar crime defense practice at McCarter & English.

More charges are likely. The government is under pressure to clean up Wall Street after an era of excess that imploded into the financial

[Brugmansian]

For now at least, Craig C. Drimal lives in Weston, CT. One of those tiny (pop 10,000), quaint New England towns where the median income is over $150,000. Two acre zoning. Can’t open a gas station, 7-11 or even a bank. Only commercial zoning are a few spots downtown which were grandfathered in I don’t know how many decades ago. Not many if any swamp yankees in Weston.

[HAL9000]

Tip of the iceberg, with lots of Clinton connections as the authorities dig deeper.

[Rafterman]

Octopussy

Sorry, couldn't resist.