FBI seizes documents after investigations into insider trading
Seal of the FBI
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The wide ranging insider trading investigation that's been unfolding for the last few days has gotten physical. FBI agents have seized documents during coordinated raids at different hedge funds in New York, Connecticut and Massachusetts.
Our Washington Bureau Chief John Dimsdale has been covering this story for us and he is with us now live. Good morning John.
JOHN DIMSDALE: Good morning Jeremy.
HOBSON: What's the FBI looking for in these raids?
DIMSDALE: This is a three year old investigation into the trafficking of corporate secrets -- the kind of information that can move markets. Investigators have discovered that there's a growing number of professional groups who get inside tips and then sell them to hedge fund and mutual fund managers.
HOBSON: Are we expecting more raids here?
DIMSDALE: Absolutely. This investigation is still on going, it's been going on in secret, but over the weekend the Wall Street Journal began revealing some of the details so agents are now moving quickly to make sure that documents aren't destroyed and suspects don't flee.
HOBSON: John -- why are the federal investigators cracking down on this right now?
DIMSDALE: In part it's the growing number of these groups that are guying and selling inside information, but there may also be a link to the financial crisis. Investigators who went through the debris of the bank failures and the bailouts reportedly discovered evidence that some traders were leaking secret information to the public when it gave them a a financial advantage. Just a sign of how big this could become -- those strategic leakers might include some of the nation's leading investment banks including Goldman Sachs.
HOBSON: That would be interesting. Marketplace's John Dimsdale in Washington, thanks.
DIMSDALE: Thanks Jeremy.