More Charged As Insider Trading Probe Expands

Two new arrests and two guilty pleas announced

NEW YORK — Federal authorities revealed charges Tuesday against three hedge fund portfolio managers and a hedge fund analyst, describing a paper-shredding, flash drive-destroying panic that ensued when they thought they faced the scrutiny of investigators.

The two new arrests and the announcement of two guilty pleas expanded a federal crackdown on insider trading that masks itself as legitimate market research. The case raised the number charged in the probe to 12. The Securities and Exchange Commission said the conspiracy earned more than $30 million in illegal profits.

"Shred as much as u can," one of the men wrote to another in a string of electronic messages that were traded after they saw news reports describing U.S. Attorney Preet Bharara's assault on Wall Street insider trading, according to a criminal complaint filed in U.S. District Court in Manhattan. One of the four told investigators he even destroyed computer drives and scattered the pieces in several garbage trucks.

Bharara on Tuesday promised more arrests, saying "we are far from finished."

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