NEW YORK — Insider-trading charges are being prepared against a vast network of consultants and traders across the US financial industry in a years-long probe that a report suggests will reveal a pervasive culture of backroom dealing.
The investigation could be the largest insider-trading probe in US history, The Wall Street Journal said Saturday citing people close to the issue, with federal officials examining if multiple, organized insider-trading rings reaped illegal profits of tens of millions of dollars.
Some charges could be brought before the end of the year, the Journal said.
The criminal probe is examining some three dozen companies in the probe, which is examining the “expert networks” to clients such as hedge funds and mutual funds, which connected managers of companies with investors in a bid to offer inside tracks on financial deals, according to the report.
Highlighting a focus on insider-trading by the Manhattan US attorney Preet Bharara, the Journal noted he has called the issue a “top criminal priority” for his post.
“Illegal insider trading is rampant and may even be on the rise,” Bharara warned in a speech last month.
Pinpointing over a dozen companies based on both US coasts, the Journal reported that a federal grand jury in New York has already heard evidence in parts of the criminal probe.
Among those being investigated, the newspaper said prosecutors were examining whether bankers with the Goldman Sachs Group leaked information about transactions, including health-care mergers, in a bid to benefit investors.
Inside traders are generally known to profit after being tipped off on deals ahead of time — for example, giving them an opportunity to buy stocks before acquisitions, and then selling them after the shares rise in value.
As well as large financial firms like Goldman Sachs, the investigation is also examining independent analysts and research houses for providing non-public information to hedge funds. The report suggest the three-year probe has involved wiretapping the telephone conversations between consultants and investors.
In one case, a leading analyst at the small Oregon-based Broadband Research wrote to clients on October 26 explaining the firm was under investigation.
Analyst John Kinnucan, in an email sent to two hedge funds and two mutual funds and that was obtained by the Journal, said FBI agents had attempted to get him to help with the probe.
The officials were “thoroughly convinced that my clients have been trading on copious inside information,” Kinnucan wrote.
“(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no idea.) We obviously beg to differ, so have therefore declined the young gentleman’s gracious offer to wear a wire and therefore ensnare you in their devious web,” he wrote, according to the Journal.
In another part of the probe, trading firm First New York Securities anticipated mergers unveiled in 2009, and profited from that information, the financial daily said, citing people close to the investigation.
A spokesman for the 250-person firm acknowledged to the Journal that it was “one of more than three dozen firms that have been asked by regulators to provide general information in a widespread inquiry.”
Combat veteran unloads on Trump’s erratic behavior towards Iran in devastating Senate speech
Senator Tammy Duckworth (D-IL) took to the Senate floor on Tuesday to rebuke President Donald Trump for putting the United States on the path to a potential war with Iran.
"The past week has laid bare just how dangerous it can be to have a president who approaches foreign policy as if as it reality show, where the worst case that can happen is getting kicked off before the next episode airs. The president doesn’t seem to recognize that his words, his decisions can have life-and-death consequences for the brave Americans who wear our nation's uniform," she remarked.
"What we’ve seen from the White House of late should worry every single one of us. In one breath Trump is beating the drums of war, thumping his chest and pushing for a conflict that would kill an unimaginable number of people -- service members and civilians. In the next breath he tries to act like a peacemaker who wouldn’t even think of starting a war. It’s gaslighting, plain and simple."
WATCH: Klobuchar uses Trump’s own intel advisors to blast GOP’s inaction on election security
Senator Amy Klobuchar (D-MN), a 2020 presidential candidate, blasted her Republican colleagues on the Senate floor Tuesday morning over an election security bill.
Klobuchar wants to attach the legislation, known as the Secure Elections Act, to a defense spending bill. But the move faces opposition from GOP leadership and the White House.
“We know one thing, and who do we know it from? We know it from the president’s own national intelligence director, we know it from his FBI director, we know it from all of his security leaders, and that is that Russia invaded our democracy,” Klobuchar said.
Indicted GOP lawmaker spent campaign cash on affairs with three different lobbyists and one of his own staffers: DOJ
A new filing from the Department of Justice claims that Rep. Duncan Hunter (R-CA) has had multiple extramarital affairs since first taking office in 2009 -- including three with registered lobbyists and one with one of his own staff members.
According to the DOJ filing, as flagged by USA Today's Brad Heath, Hunter illegally used money donated to his congressional campaign to "carry out a series of intimate relationships" with women who were all involved in politics.
The DOJ argued that it needs to be able to discuss these affairs in front of jury in order to prove Hunter deliberately misused campaign funds.