Wiretaps aren't just being used to investigate violent crimes, organized crime and drug offenses anymore. Consider the recent insider trading case of Raj Rajaratnam of the Galleon Group: an investigation by the Securities and Exchange Commission over the course of two or three years did not yield enough information to hold Rajaratnam accountable for insider trading, however, 2000 recordings collected over a year-long wiretap of his cell revealed an extensive network of insider trading that could finally be prosecuted.
Thirty-year-old John Femenia has been charged with using confidential information obtained through his position at Wells Fargo Bank to give guidance to his friends on stock transactions that could have a big payout. Wells Fargo was tapped to provide financial backing in the mergers of several companies; Femenia allegedly disseminated this information to friends who then purchased stock in the acquiring company.
Insider trading convictions are drawing greater scrutiny from the U.S. Justice Department and the U.S. Sentencing Commission. Both groups are encouraging federal judges to sentence convicted white collar criminals to longer prison terms.
The Charlotte Observer released information of note last Friday to those interested in issues of white collar crime. The Securities and Exchange Commission has partnered with the U.S. Attorney's office for the Western District of North Carolina, North Carolina's Attorney General's office, the FBI, the North Carolina Secretary of State's securities division, the Internal Revenue Service's criminal division, Mecklenburg County's District Attorney's office and the U.S. Postal Inspection Service to form a task force based in Charlotte to fight against various forms of securities fraud. The reasoning behind placing the task force in Charlotte is partially due to the fact that the city happens to be home to multiple Fortune 500 companies, making it the second largest center for banking in the country. This new task force intends to focus its' efforts on seeking out instances of financial crime such as accounting fraud and insider trading.