Here's A Rundown Of Everything That Just Happened In The Huge Insider Trading Scandal

inside traders

Things have been moving fast in the fed’s huge insider trading case, so here’s your chance to catch up.

As you probably know, the feds are currently investigating a “large insider trading ring,” as they apparently call it.

Just days after the Wall Street Journal exposed the story, the feds began subpoenaing the firms involved and in some cases, obtaining search warrants and raiding them.

Yesterday the FBI hit hedge funds across the Northeast. And today was Mutual Fund (Janus, and Wellington) and Citadel and SAC Capital day. 

That takes the tally of firms now being investigated by the feds for insider trading to 8.

As far as a timeline goes, here’s how it breaks down. The first news to break this morning (after yesterday’s three raids) was that Wellington Management – a gigantic Boston-based money manager with $598 billion AUM, had been hit with a request for documents. This was big. It was the first mutual fund company to become embroiled in the scandal.

The firm, headed up by Perry Traquina, announced yesterday in an internal conference call that it was “conducting a review of records, though it said it didn’t engage in illegal trading.” Then officials revealed today that they had received an FBI request though they didn’t detail what type of information the feds wanted.

Then, it broke that Janus Capital ($160 billion AUM) had also been contacted by the Feds. The Colorado-based firm is the first non-Northeastern fund to be hit by the probe. JNS was almost immediately halted for trading. rumours had circulated as early as this weekend that the mutual fund was involved in the investigation, and now it’s been confirmed.

Janus said in a statement, “Janus maintains rigorous compliance procedures and Janus has confidence in the integrity of its processes and its people.”

It turns out that Wellington, and Janus, all received an email from a Portland, Oregon firm (maybe Kinnican’s) provides “expert” information, according to Reuters.

Reports from CNBC that a third mutual fund – MFS – also received a subpoena, turned out to be purely rumour. “MFS did NOT receive a request for documents,” a spokesman for the company told us.

Then SAC Capital – Steve Cohen’s hedge fund – which is seemingly at the centre of all of this, revealed that, yes: they too have been approached by the FBI for documents.

MarketWatch reported that the fund had sent investors a letter that said “the government served identical “extraordinarily broad” subpoenas on a number of investment managers of different sizes and descriptions, including SAC.” They added that the summons did not suggest that any SAC employees were involved in illegal activity.

And rounding out the end of a long 48 hours of summons and raids, Citadel has apparently just received a subpoena too.

UPDATE: Don Chu was arrested on Wednesday morning.

Phew.

Now just speculating here, but… does anyone get the feeling that the FBI is moving slowly to the biggest fish of all? Yes – you know what we’re talking about.

We’ll keep updating our list of who’s been implicated in the scandal, so click here to check out the full run down of people and firms involved >

And all the latest news on the scandal can be found by clicking here >

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