NEW YORK (Reuters) - The U.S. Justice Department sees wire taps as a crucial tool to root out securities fraud as it collaborates more closely with market regulators, a senior department official said on Friday, one day after new charges were filed in the biggest U.S. hedge fund insider trading scandal.
Federal authorities tapped phones to help unearth an insider trading ring that includes the Galleon Group hedge fund, other fund managers, Silicon Valley executives, traders and lawyers.
Prosecutors have alleged $40 million of insider trading profits from their investigation so far. The Securities and Exchange Commission has alleged $53 million in illegal profits from its own civil investigation.
"We have become more aggressive. I also think we have become and we will continue to become more collaborative," said Lanny Breuer, a senior Justice Department official who oversees criminal prosecutions.
"It is both aggressive in trying to use whatever tools we have to identify wrongdoing," he said one day after his agency, the SEC and the FBI announced dozens of new charges in the hedge fund insider trading scandal.
Breuer said the use of wire taps have and will prove to be effective. "I think it's essential," he said at a Practising Law Institute securities conference in New York.
The Justice Department is also creating partnerships as it could with states, regulators and other authorities. He said he was considering embedding lawyers from other agencies such as the Commodity Futures Trading Commission within his department.
"With limited resources, it seems to me the more people we can bring into our family, so to speak, so we can hold those accountable, we ought to do just that," he told reporters on the sidelines of the conference.
Story Copyright 2009, Reuters
Photo Copyright 2009, Getty Images
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