14 charged over alleged insider trading

Fourteen more people have been charged in the investigation of an alleged insider trading ring centred on hedge fund group Galleon and its founder Raj Rajaratnam.

The FBI swooped on addresses in New York, Connecticut and New Jersey this morning, to arrest Wall Street traders, lawyers and hedge fund managers accused of trading in inside information. In legal complaints unsealed today, prosecutors allege that Zvi Goffer, a fund manager now at a firm called Incremental Capital, paid a network of sources for information. He worked at Schottenfeld, a New York broker-dealer in 2007 and moved to Galleon in January 2008. Mr Goffer's scheme involved shares of 3Com and Avaya, according to prosecutors.

Mr Rajaratnam and five others were arrested last month in a move that sent shockwaves through the hedge fund industry. The Sri Lanka-born manager demanded his traders get an 'edge' over their rivals by finding out as much information about companies as possible in order to make profitable bets on their share prices.

Attorney Preet Bharara says sophisticated criminals "took a page from" drug dealers in using pre-paid cellphones and at one point a defendent bit in half a cell phone chip to destroy the evidence. The Securities and Exchange Commission dubbed Mr Goffer Octopussy, "because he had his arms in so many insider dealing schemes".

Both sets of arrests were made possible by the use of court-ordered wiretaps, the FBI said.