Insider Trades

There were 13 people arrested on March 1, 2007 accused of trading as insiders. The scheme involved 4 investment bankers, hedge funds, day traders, lawyers and even some supervisors who found out about the trading and blackmailed traders in order for them to keep quiet about the scheme. Nine of the defendants have been arrested and 4 pleaded guilty to crimes including bribery and securities fraud. The tactics that these traders used were all too familiar to the investigators: tipping traders about potential up/downgrades of stocks, leaking information about stock prices moving and potential stock mergers. Two of the men arrested met in Grand Centrals "Oyster Bar" to discuss debts owed to one another and exchange cash made from the profits of insider trading. One of the men would give his partner tips on rating changes and in return his partner would make quick changes to his funds and gain a huge profit. Over a 5 year period one of the accused men was said to have made over $5 million in illicit profits.