There’s a long list of hedge fund managers — and their co-conspirators — brought down by an FBI wiretap.
Raj Rajaratnam is obviously the most famous of the wiretapped investors, brought down because he was heard getting illegal tips on the phone.
Now a whopping 97 others might share the same fate, because according to an article in the Financial Times, if you had a working relationship with expert network firm Primary Global Research (PGR), chances are, the FBI has a tape with your voice on it, in storage.
Obviously if they did nothing wrong, they’ll be fine.
But — “US prosecutors intercepted phone calls involving nearly 100 investment fund clients of [PGR] in 2009 as part of an insider trading investigation,” the FT reports.
A judge allowed the FBI to “intercept calls involving two telephone lines used by Primary Global in October 2009,” as well as the “unique personal identification numbers associated with 97 clients, including hedge funds and mutual funds.”
The number seems high. However, there were previous indications that the government insider trading investigation was extraordinarily sweeping: multiple hedge funds were subpoenaed and raided last year, and the justice department said at least 50 companies had received a summonses in connection to the probe.
“The government identified 15 of those as targets of its investigation in 2009,” the FT reported. “It was not clear if the 97 money managers were told their conversations were recorded.”
So in fact, all those hedge fund managers that were having their offices and homes swept for listening devices, weren’t paranoid at all… They were kind of right.