U.S. authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according to people familiar with the matter.
The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.
The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.
If events play out the way this report suggests they might, the investigation could deliver yet another blow to the image and credibility of the beleaguered American financial sector. Lest you think this could be a retributive ploy or an exercise in class warfare by the anti-business Obama administration (a possibility that crossed my mind), note that this probe was initiated in 2007 under the Bush administration -- before the financial collapse of 2008.