Insider Trading Probe Sparks Paranoia in Traders


Late on a recent Friday night a hedge fund trader met with a reporter in a downtown pub called Tom & Jerry's.

Although the reporter was a regular at the place, it isn’t a favorite of the hedge fund trader. But on Friday it was the hedge fund trader who asked that the pair meet here.

He was afraid all of his usual haunts might be bugged.

“These days, if you aren’t wearing a wire, you have to assume someone nearby or on the other end of the phone is,” he said.

He went on to explain that many traders who regularly met with others for drinks or dinner were become increasingly fearful of “talking shop.”

“You mention a rumor. Or something you heard secondhand, and everyone wonders: Is this inside information? Which one of us at the table is taping this?” he said.

The reporter pointed out this might not be unintentional. The stated aim of the U.S. Attorney’s Office is to crack down on private networks of elite traders with access to non-public information. To level the playing field.

“If traders are paranoid, that’s a feature, not a bug,” the reporter explained.

“Jesus. Well, I need another one of these. You’re buying,” the trader said to the reporter. He held up an empty glass and peered through the bottom. The effect was like that of a spyglass in reverse, making the trader look smaller and farther away than he was in real life.


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