FBI investigation into incidences concerning insider trade has cast its net wider. Currently, legal action has been taken against Galleon Group a hedge fund, where many of the accused persons entered a plea of guilty and agreed to testify against fellow defendants. The Galleon case which is the biggest of insider trading cases in history is still being tried.

Currently, a ruling on whether telephone conversations that were recorded in secret can be admissible evidence in the trial is being awaited. Some of those that have entered a plea of ‘not guilty’ include the Galleon founder, Raj Rajaratnum, and seven others. Their cases will start to be tried in January. So far, Robert Moffat, who had been an executive at IBM, is serving a six-month term in prison for transferring tips to a female employee of Galleon.

Firms that are said to be targeted in the investigations include Diamondback Capital Management and Level Globe Investors which handle client money to the tune of approximately $4 and $3 billion respectively. The firms are both located in Connecticut and are said to be the brainchild of a former manager at SAC Capital Investments, which is responsible for assets valued at $16 billion.

While Diamondback was adamant not to comment on the reports, Level Global admitted that federal officials had paid its offices a visit. A fund-manager in a third firm Loch Capital Management was said to have links to a witness in Galleon and this reportedly led to a raid by the FBI on the firm’s Boston Offices.
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