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The FBI’s expanding insider trading investigation has ensnared a half dozen investment firms over the To little very, getting prescription drugs in canada to use eyes cbs prescription drugs in


The FBI’s expanding insider trading investigation has ensnared a half dozen investment firms over the

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past few days, including SAC Capital, Level Global, Diamondback Capital, Janus Capital, Wellington Management, Goldman Sachs, and Citadel. These firms have received subpoenas or have otherwise been targeted as part of the criminal probe, according to the Wall Street Journal.

The notion that these firms are engaged in insider trading should not be a surprise. As Matt Taibbi points out, everyone is doing it. Traders make money because they know things that you don’t, and often that information is non-public. What’s surprising is that there is an investigation, and that someone might actually get caught.

The current investigation is related to the 2009 case targeting Galleon Group and Raj Rajaratnam. Incredibly, that investigation was the first insider-trading probe to use a wiretap, according to prosecutors:

“The wiretaps, said by prosecutors to be the first in an insider-trading case, were made with the assistance of an unnamed cooperating witness, a former Galleon employee who was said to ply Mr. Rajaratnam with information originally to land a job.”* (my emphasis)

We know from HBO that wiretaps are often used to put dope on the table. This is also clear from the data: 2,376 state and federal wiretaps were authorized in 2009, and 2,046 of these wiretaps (86%) were used in narcotics cases. The numbers are even worse when looking solely at federal wiretaps: 93% of federal wiretaps issued in 2009 were for narcotics cases. And then, of course, there are all those warrantless wiretaps.

But Wall Street, at a time of historic levels of financial fraud, in the wake of a crisis which has driven millions of people out of their homes and out of work? One wiretap.

This is the system described in Glenn Greenwald’s forthcoming book, With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful, which explores “the legal immunity which political and financial elites have bequeathed to themselves even for egregious illegality, contrasted with the merciless system of punishment and coercion imposed on ordinary citizens.”

In the case of insider trading and other forms of financial fraud, “egregious illegality” is the norm on Wall Street. Law enforcement agencies have all the tools they need to fight these forms of crime, but instead focus resources on the dual wars on terrorism and drugs, despite the tremendous impact financial fraud has on society.

Both the historic 2009 wiretap and the expanding SAC probe offer some small hope that this situation is improving, though they also highlight the pathetic lack of oversight and law enforcement when it comes to crimes by the powerful and well-connected. All the more reason to keep your eyes on SAC, Wellington, Citadel, Goldman Sachs and the rest here on LittlesSis.

* Oddly, that bolded clause has since disappeared from the original New York Times article, but that the prosecutors said this is clear — you can find further confirmation of this here and elsewhere.