The rule used to be "nothing in print." If you needed to share a secret you got on the phone, you'd suggest someone call you on the "outside," meaning your cell phone or at home at night. But wiretaps have changed the game.
The feds go after the higher profile cases, but — and this is a big but — if you're working underneath one of these people, you're the first visit they make. They like to show up right as you are getting the kids ready for school or on your lunch break. And they're always good for a catch phrase or two when introducing themselves. When the clerk asks, "How do you take your coffee," the feds standing in line might answer for you and say, "Alone. Sir, we'd like to speak with you."
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All they need to do is pinch the younger guy and then work their way up. They get an informant like Hansel and Gretel who leave a trail of breadcrumbs that lead straight to an insider trading conviction.
Raj Rajaratnam's wiretaps were very incriminating and eventually led to his conviction.
Click here to watch the "American Greed" episode on Raj Rajaratnam. Plus, watch the all-day "Greed" marathon this Friday starting at 6 am ET.
Martha Stewart got a tip to sell ImClone (before I did — I was horrified she got a better call than me). She didn't go to jail for insider trading – it was for lying about it.
Stevie Cohen and his band of Merry Men at SAC Capital seem to be facing a more daunting task than "The Warriors," who had every gang in New York City and the authorities looking for them (a cult classic — if you haven't seen the movie, you should.) Eight employees of SAC (now known as Point72) have so far been convicted of insider trading and the firm agreed to a $1.8 billion settlement. But, despite years of investigations, wiretaps, informants and whatnot, they haven't been able to get the SAC founder on insider trading.
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