Preet Bharara was the undefeated top cop of Wall Street -- but now his legacy is in question

Preet Bharara, the US attorney, abandoned several insider trading cases last week.

These included charges against
former SAC Capital trader Michael Steinberg — who had plead guilty already.

It’s enough to raise the question that, a year ago, would seem absurd: has the reputation of Wall Street’s top cop been irreparably tarnished?

“He’s a guy who fought doggedly to get convictions that were overturned on a technicality,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business and at Michigan’s law school. “The loss was based on a technical but important interpretation of a statute that is a catch-all anti-fraud statute that was not drafted specifically for insider trading.”

Bharara, the Department of Justice and the Securities and Exchange Comission were pursuing Steinberg and others under a rule that let them prosecute targets even though they believed these traders earned little to no benefit from providing insider information. Now, thanks to an appellate court ruling and the US Supreme Court’s recent decision to not review that ruling that’s unusable.

And with that, goes a handful of the DOJ’s highest-profile Wall Street cases, Bharara’s undefeated streak and some of the lustre associated with the man who scared Wall Street as much as any person since Eliot Spitzer gave up the Manhattan District Attorney seat to pursue his political career.

The SEC’s decision last week to abandon six guilty pleas and the DOJ’s move to dismiss the case against Michael Steinberg, puts to an end the guarantee of an unblemished record for Bharara’s tenure.

While some, like Gordon, are more inclined to point out Bharara’s accomplishments, hard-charging prosecutors like him have no trouble finding detractors.

Business Insider spoke to a few prosecutors, who all asked to remain anonymous because of their past or current relationships with Bharara.

“This means he’s not going to ride off into the sunset with his head held high when all this is over,” said one former prosecutor.

But some of Bharara’s colleagues rushed to his defence.

“For years, the way the Southern approached insider trading put a chill on illegal activity on Wall Street,” one said, referring to the Southern District of New York.

And its not as if Bharara hasn’t had things on his side for a while. At one point in 2014, Business Insider counted 79 wins for the prosecutor, and zero losses.

“Every time you notch another win,” a fourth source said, “you get inevitably closer to losing.”

And that’s what finally happened to the so-called ‘Sheriff of Wall Street.’

Business Insider reached out to spokesmen at the SEC and the Department of Justice, both agencies declined to comment.

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