Wall Street Wiretaps: Investigators Use Insiders' Own Words To Convict Them
It was another busy year for federal authorities pursuing insider trading cases. Seventy-five people have now been charged in the last three years, and investigators say that success comes largely from their decision to attack insider trading the way they take down the Mafia and drug cartels — with tools such as wiretaps, informants and cooperators.
The story behind how the government decided to go after insider trading as hard as it goes after the mob is really just a story about dead ends.
"It was a product of sitting around the table and saying, 'OK, nothing else has worked. Where do we go now?'" said FBI Agent David Chaves, sitting in the FBI's New York field office in downtown Manhattan.
No Willing Cooperators
Chaves and his colleague Patrick Carroll head securities fraud and white collar crime units at the FBI. These guys have taken down Bernie Madoff, Martha Stewart and WorldCom chief Bernie Ebbers. But when they started getting whispers more than 10 years ago that there was an epidemic of insider trading at hedge funds, Carroll said, they were stumped.
"We had people who were telling us things, but we didn't have anybody who was in a conspiracy that was going to tell on what the others did," he said.
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