Over a year after the federal authorities raided hedge funds, the FBI has arrested three men as part of its insider trading investigation, including a Manhattan resident who wasn't home when they went to his home this morning. more ›

Danielle Chiesi, a former beauty queen who became a hedge fund trader, was sentenced to 30 months in prison for her role in a multi-million-dollar insider trading scheme. Chiesi, who once said insider trading was "like an orgasm," will also have to serve two years of supervised release and 250 hours of community service, plus pay a $25,000 fine. It was under the recommended 37-to-47-month sentence from prosecutors, so maybe that's why she was smiling outside court. more ›

The United States Attorney for the Southern District of New York has announced along with the FBI that portfolio managers Samir Barai, 39, and Donald Longueuil, 34 have been charged with conspiracy to commit securities and wire fraud for their involvement in an insider trading scheme. Two other research analysts have plead guilty to conspiracy to commit securities fraud for their roles in the massive scheme, which Manhattan U.S. Attorney Preet Bharara describes as "a brazen cover-up... like something out of a bad movie." (Ironically, that line is like something out of a bad movie.) more ›

The federal authorities have made their first arrest in the wide-ranging insider trading probe: Don Ching Trang Chu, an executive at "expert network" research firm Primary Global Research, was arrested the company's California office. Chu, who resides in Somerset, NJ, had been planning to go to Taiwan on Sunday, and the Wall Street Journal reports, "Mr. Chu has been charged with one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud and fraud in connection with securities. The first count carries a maximum sentence of five years and the second up to 25 years. Both carry a potential fine of $250,000 or twice the gross gain or loss from the offense, prosecutors said." more ›

As if Saturday's Wall Street Journal article about how the feds are readying insider trading charges (which "could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation") wasn't warning enough! Today, the FBI raided three hedge funds—the Connecticut offices of Diamondback Capital Management LLC and Level Global Investors LP and Boston-based Loch Capital Management LLC. The FBI simply said, "The FBI is executing court-authorized search warrants in an ongoing investigation." more ›

Wall Street is worried about the federal authorities' three-year probe that could result in widespread insider trading charge that, according to the Wall Street Journal, "could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation." The probes, "which authorities say could eclipse the impact on the financial industry of any previous such investigation...have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say." more ›

Five employees of Staten Island's Gryphon Holdings Inc. were arrested yesterday on federal fraud charges for allegedly cheating investors out of $17.5 million. The firm apparently pressured their mainly elderly investors into buying investment packages, touting their credentials all the while. They bragged of $1.4 billion in holdings and that two of their "traders," Michael Warren and Kenneth Maseka, had graduated from the Wharton School of Business and had worked at places like Lehman Brothers and Goldman Sachs. In fact, Warren and Maseka didn't even exist. more ›

A rabbi known as the "Brooklyn Bundler" for his ability to raise campaign money for (mostly) Republican candidates was charged on Thursday with trying to extort $4 million from a Connecticut hedge fund. Rabbi Milton Balkany, who serves as the dean of the Bais Yaakov day school in Borough Park, allegedly dreamed up the scheme after becoming a "spiritual adviser" to a federal inmate who told him about a Connecticut hedge fund that had used inside information in stock trades. Prosecutors say Balkany told lawyers at the hedge fund that unless they handed over $4 million ($2 million of which would go to Bais Yaakov), he'd instruct the inmate to rat them out. But Balkany insists he's just being punished for doing a mitzvah! more ›

The wife of an Upper East Side hedge fund billionaire grabbed a homosexual worker's privates and told him he needed a "good f---" to make him straight, according to a sexual harassment suit filed by the former employee. William Gamble, 47, accused Lisa Maria Falcone of trying force herself on him—then punching him in the gut when he said no. more ›

Today, a federal jury found two Bear Stearns hedge fund managers not guilty of fraud related to subprime mortgages. Portfolio manager Ralph Cioffi and the funds' COO Matthew Tannin were accused of misleading investors—and losing $1.6 billion—were acquitted after a jury took less than a day to deliberate on charges. more ›

Even though he's claiming he's innocent of insider trading charges, billionaire Raj Rajaratnam is liquidating his Galleon Group hedge fund and preparing to shut it down. In a letter sent to investors, Rajaratnam wrote, "I want to reassure investors of the liquidity of our funds and assure Galleon employees that we are seeking the best way to keep together what I believe is the best long/short equity team in the business. I want to reiterate that I am innocent of all the charges." more ›

To no one's surprise, traders at the Galleon Group have been working on their resumes and calling their lawyers, after the hedge fund's founder Raj Rajaratnam was arrested on insider trading charges last week. However, he was in the office yesterday (out on $100 million bail) and also offered a letter to employees, friends and clients: "As I am sure you understand, I am not able to respond in detail to the charges recently brought against me. But let me be clear: they are, without exception, entirely baseless. I am innocent and will vigorously defend myself and our firm." more ›

The upside of being a billionaire when you're accused of insider trading? You can post the $100 million bail! Hedge fund founder Raj Rajaratnam, who was arrested on Friday after feds said he and five others shared inside information and tips to make $20 million, posted the bail on Saturday. The NY Times says that he's expected to be at his hedge fund's offices today to address his employees. more ›

A NJ man fell to his death from an escalator at Atlantic City's Pier at Caesars shopping center. According to the Press of Atlantic City, the victim, James Vellanti, was "chief operating officer for the hedge fund JNF Asset Management LLC in New York." The police are investigating the incident, which is the second fatal fall there in 13 months (last year, a 25-year-old man was sitting on the moving escalator's handrail and fell to his death). more ›

A group of hedge funds are suing Milton "Todd" Ault, the Californian C.E.O. of investment firm Zealous Inc., for allegedly blowing their $4.2 million investment on porn productions and a swingers ranch. Who is Todd Ault? Among other things, he works in adult "publishing," and his company co-produced a porn film based on Sarah Palin. (Could it be Who's Nailin' Paylin?) Lawyers for the hedge funds say their millions were supposed to be steered to an "integrated global community of trading partners." In other words, a swingers ranch! Ault vehemently denies the allegations, and insists "there was never going to be a swingers club" upstate in New Lebanon, which court papers erroneously identify as the Catskills. (It's in Columbia County, and home of the bitchin' Lebanon Valley Speedway, which ZZ Top has been known to RAWK.) Ault tells the Daily News, "These hedge funds didn't do their homework when they made their investment," and says the plaintiffs' money was lost in the stock-market collapse. more ›

If you're not going to invest your money with a reputable Ponzi schemer, than why not with a livery cab driver posing as a hedge fund owner? Alan Fishman, Brooklyn resident and "president" of AR Capital Group, and Daniel Ledven (an AR Capital manager) were arrested on fraud charges and a court document noted Ledven's testimony to the SEC, "The primary occupation of the president of ARC, was as a livery driver, and the president had very little investment experience prior to starting ARC." Between 2003 and 2006, they managed to raise $20 million—sending $18 million to bank accounts in the Ukraine and Lithuania. According to the Daily News, "One of the biggest victims likely was a 65-year-old unidentified retiree from Ohio who was hooked with a cold call. The man initially invested $10,000, then another $250,000. Phony positive return statements hoodwinked him into eventually boosting his investments to about $8 million." Fishman and Ledven are out on bail; a third man, Gary Gelman (Fishman's nephew), is on the lam. more ›

Guess who's getting tired of being locked up in his East 64th Street penthouse, instead of jail? The Post reports that $50 billion Ponzi scheme mastermind Bernard Madoff has, according to a source, complained about his gilded cage, whining, "I'm a prisoner in my own house! I can't go anywhere! I'm stuck here all day!" Tell it to the judge who allowed you to stay at home! And lest you think Madoff can surf the Internet (and, you know, read celebrity gossip and transfer funds to off-shore accounts), his web and phone habits are being tracked. more ›

The federal judge deciding whether to revoke Bernard Madoff's bail will announce his decision on Monday, giving the fraudulent investor another weekend under house arrest at his $7 million Upper East Side penthouse. more ›

Bernard Madoff, who says his investment business was actually a Ponzi scheme estimated at $50 billion, is scheduled to appear in court today for a bail hearing. Bloomberg News reports, "The government may ask that Madoff’s bail conditions be modified, including that bail be withdrawn and the former executive imprisoned." Madoff is currently on $10 million bond and is under house arrest at his East 64th Street penthouse apartment. more ›

Bernard Madoff better have enough coin to pay his cable bills, 'cause he'll be at home a lot more: His new bail agreement puts him under 24 hour house arrest, with security guards (that Madoff must pay), in order to "prevent harm or flight." The harm would be reports of death threats; the flight would be, oh, running from investors big and small who are upset he lost, cumulatively, billions. more ›

being threatened. According to the Daily News, a source "who knows several of Madoff's affluent victims" said, "Bernie has been told that if he doesn't cough up every dime he has hidden in offshore accounts, someone in his family will be killed." Another source adds "at least one of the threats was aimed solely at Madoff, and that the matter was referred to the FBI." more ›

The $50 Billion Ponzi Scheme Man Bernard Madoff is still out on bail but under home detention, which means he's got one those ankle-monitoring bracelets. Plus he has a curfew—between 7 p.m. to 9 a.m., he has to be in the apartment. more ›

The NY Post caught Bernard Madoff, who admitted his business was actually Ponzi scheme and probably lost around $50 billion of investors' money, "skulking" out of his East 64th Street apartment building and calls him "the Grinch who stole...everything"—as well as the "Most Hated Man in NYC." The Daily News runs down some developments, like how the FBI is looking for witnesses (like "the auditors working from a New City, Rockland County, storefront who certified Madoff's investment firm as 'solvent'") and the NY Times says that, so far, Madoff's family does not appear to be involved in the scam. more ›

Securities and Exchange Commission inspectors have been working overtime to go through the records of Bernard Madoff and his investment firm. Bloomberg News reports that investigators "found evidence he ran an unregistered money-management business alongside his firm’s brokerage and investment-advisory subsidiaries." Also, "Investigators are still trying to figure out where customers’ money went," as Madoff's estimate of $50 billion in losses may be "roughly accurate." more ›

As investigators continue to look into the $50 billion Ponzi scheme that investor Bernard Madoff was running, what's interesting to note that Madoff's dealings affected the super-wealthy to the just plain-old mom-and-pop savers. Madoff (pictured, with his Park Avenue apartment building at right) was arrested after he admitted to employees (including his sons) that his successful investment firm was a "big lie" that he had used investments from clients to pay returns to earlier clients. more ›

The Securities and Exchange Commission's associate director of enforcement Andrew Calamari (Calamari!) said, "Our complaint alleges a stunning fraud that appears to be of epic proportions." The criminal complaint suggests that Madoff "deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars." Yup, that sounds like a Ponzi scheme! The complaint also says, per employees, Madoff ran the "investment business" on a separate floor and was "cryptic" about it. The NY Times says this might be the largest fraud in Wall Street history. more ›

The arrest of prominent Manhattan lawyer Marc Dreier in Canada last week appears to be just the tip of the iceberg: On Sunday night, Dreier was arrested by U.S. authorities at LaGuardia airport, accused of "a $100 million fraud scheme". The NY Times says the feds "portray[ed] his recent undertakings as more high-stakes grifting than high-end lawyering." more ›

New York Magazine reveals Silda Wall Spitzer has been working at a hedge fund since last month. The former corporate attorney will "be helping recruit new investors at Metropolitan." The Observer thinks the job "sounds suspiciously very much like what a hedge fund 'marketing executive' does," citing a W magazine article, where one person explained, "Guys who have a load of money [invested] in these big funds are often pigheaded, type A male personalities. They want a hot chick with a nice ass and nice boobs who is going to come in and sell the fund to them." Still, the Observer points out given Wall Spitzer's age (she's 50) and accomplishments, she's "hardly a bimbo," and suggests she's up for "a little revenge socializing." more ›

Samuel Israel, the hedge fund founder who went on the lam the day he was supposed to start a 20-year prison sentence, told a judge he did try to kill himself two days ago. WCBS 2 reports that during this morning's hearing in a Manhattan federal court, Israel claimed "he swallowed 175 morphine pills and the rest of his painkillers for his bad back." However, when he woke up, he "realized God didn't want me to do that so I turned myself in." more ›