The widening probe of Wall Street insider trading nabbed four more hedge fund heavies who'd frantically tried to hide evidence, prosecutors said Tuesday.
As they saw the FBI closing in, the financiers directed each other to shred documents, destroy hard drives and dump everything else into the garbage, authorities alleged.
"So I just [expletive] ripped it apart right there...pulled the external drives apart," Connecticut-based trader Donald Longueuil told pal Noah Freeman, prosecutors said.
"Put 'em into four separate little baggies, and then at 2 a.m. ... threw the [expletive] in the back of like random garbage trucks."
It was for naught: Freeman was wearing a wire.
"The lengths to which two of these defendants went to cover their tracks sounds like something out of a bad movie," U.S. Attorney Preet Bharara said.
Longueuil and Freeman, who worked for SAC Capital Advisors, were charged along with two former Barai Capital Management execs, Samir Barai and Jason Pflaum, with a $30 million scheme to pay corporate insiders for nonpublic information.
Worried they'd been uncovered, the FBI said Barai sent an electronic message saying, "I think U just go into office ... shred as much as u can."
The busts are the latest in a growing investigation of hedge funds that's already clocked 46 arrests. "We are far from finished," Bharara said.
The investigation, disclosed in the fall, has concentrated on hedge fund managers who tried to harvest inside info about companies through contacts at a California research firm, Primary Global Research. The company boasted of its results, but authorities say it specialized in linking corrupt employees of companies who'd spill financial results or merger announcements to hedge fund managers eager for a trading edge.
FBI Assistant Director Janice Fedarcyk said, "When you are paying insiders for earnings data before it's announced, that isn't research. That's cheating."
Daily News
Read more: http://www.nydailynews.com/news/ny_crime/2011/02/08/2011-02-08_wall_street_insider_trading_probe_snares_quartet_of_hedge_fund_big_shots_hiding_.html#ixzz1DT3rEfYI
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