Friday morning FBI agents swept in on six men from New York City to San Jose, Calif., busting what U. S. Attorney Preet Bharara called "the largest hedge fund insider trading case ever charged, criminally.
"I want to emphasize that this is not a garden-variety insider trading case," Bharara told reporters Friday.
The group that includes Fortune 500 executives, a hedge fund manager and a management consultant are accused by the Justice Department and the Securities and Exchange Commission of making more than $20 million in profits by taking confidential information from corporate insiders and using it to gain an unfair trading advantage on stocks, including Google and Hilton.
Bharara, whose jurisdiction covers New York City, announced that Friday's arrests Friday were part of a crackdown on hedge fund insider trading.
"We are targeting white collar insider trading rings with the same powerful investigative tools that have worked so successfully against the mob and drug cartels," he said.
"The real impact of this case could well be in Congress," said John Coffee, a Columbia University law school professor and expert in securities regulation and white collar crime.
"On the congressional level, we increasingly have a conflict between Main Street and Wall street. Main street sees high unemployment, few jobs, scarce credit, and they are getting increasingly resentful that Wall Street is having a record year with high profits, record bonus years coming and champagne corks popping and all of this funded by a tax-payer funded bailout," Coffee said.
Paraphrasing the 1987 movie Wall Street, the U. S. attorney said Friday "greed, sometimes, is not good. This case should be a wake-up call for Wall Street."
Insider trading is not a new phenomenon on Wall Street, but this new focus on hedge fund cases is. Hedge funds have traditionally slipped regulation by the Securities and Exchange Commission, because they are not public investment advisers, subject to more oversight.
In light of Friday's arrest, ABC News took a look at 10 of the best-known insider trading cases. From the 1980s Junk Bond King Michael Milken to the sale of ImClone stock that landed Martha Stewart in a federal prison camp, these cases captured news headlines and exposed the world of making money off information and tips.
"The largest hedge fund insider trading case ever charged, criminally."-- U. S. Attorney Preet Bharara.
At the center of Friday's arrests is billionaire hedge fund manager Raj Rajaratnam of the Galleon Group. Rajartnam, a large contributor to Hillary Clinton among others, is one of the wealthiest men in America, having amassed a reported fortune of more than $1.3 billion.
According to documents filed in federal court Friday, Rajartnam worked with managers from the hedge fund New Castle, and virtually all the illegal trading was done within those hedge funds.
Friday's indictment alleges the scheme was made possible because of insider information from executives at top national companies -- Rajiv Goel of Intel Capital, Robert Moffat, a senior vice president at IBM and Anil Kumar a director at McKinsey & Co.