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Bill Radke: Billionaire hedge fund manager Raj Rajaratnam is talking to his employees in New York this morning. He’s out on bail, three days after he was arrested for insider trading. Authorities say Rajaratnam’s firm, Galleon, acted illegally on information from companies, including IBM and Google. Marketplace’s Jeremy Hobson has more.

Jeremy Hobson: The SEC’s director of enforcement said Rajaratnam was no master of the universe. He was a master of the Rolodex — calling contacts at companies and getting information before trading.

But that’s not uncommon in the world of hedge funds — says Fordham University Securities Law Professor Steve Thel.

Steve THEL: All hedge funds that do fundamental analysis are reaching out and trying to get all the information they can. Here it looks like these defendants used that information not in a legitimate way, but in an illegitimate way to buy a particular stock. But all hedge funds are pushing very close to that line.

And now they’ll all have to re-evaluate their practices, he says. Authorities gathered evidence in this case through wiretaps. But these days, they’re relying more heavily on sophisticated software to monitor suspicious trading.

In New York, I’m Jeremy Hobson for Marketplace.