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Insider trading is like a “financial steroid” all too available on Wall Street and on Main Street, according to the Justice Department’s top enforcer for Manhattan.
Preet Bharara, the US Attorney for the Southern District of New York, described insider trading as a long-time Wall Street scourge that has become more sophisticated and far-reaching in his remarks on white-collar crime.
“Unfortunately, from what I can see from my vantage point as the US Attorney here, illegal insider trading is rampant and may even be on the rise,” he said in a speech Wednesday to a room of attorneys, a copy of which was obtained by The Post.
“Disturbingly, many of the people who are going to such lengths to obtain inside information for a trading advantage are already among the most advantaged and privileged and wealthy insiders in modern finance,” he said.
“In some respects, inside information is a form of financial steroid. It is unfair: it is offensive; it is unlawful; and it puts a black mark on the entire enterprise,” the 42-year-old lawman noted.
Bharara also fired a shot across the bow of every would-be crook on Wall Street that his office would fight to obtain every weapon at its disposal — including placing wiretaps on phones of those suspected of insider trading — to clean up the financial services sector.
Bharara gained fame last year for employing wiretaps — a method typically used with drug cartels and mob sters — to nab Galleon Group’s Raj Rajaratnam on charges of insider trading. Lawyers for Rajaratnam are fighting the use of wiretaps.
The US Attorney is becoming a rising star in legal circles because of his take-no-prisoners style of fighting white-collar crime.
During his Wednesday remarks, Bharara blasted those who oppose the use of wiretaps and other tools to thwart corporate wrongdoers.
“Some have asked why use court-authorized wiretaps in insider-trading cases?” he asked.
“The quick answer is that every legitimate tool should be at our disposal — especially where, as in the case of insider trading, an essential element of the crime is a communication,” he explained. Wiretapping has become something of a hot-button issue among legal minds. Critics argue that it threatens to undermine the civil liberties of average citizens as well as those of white-collar criminals.
“We can’t just get rid of all of our rights and liberties as American citizens just because it makes it more convenient to catch the devil,” said Bill Singer, a veteran white-collar defense lawyer at Stark & Stark.
Bharara believes crime fighters may not have much of choice given the sophistication of some of the scammers they’re up against.