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FBI Making New Arrests in Insider Trading Probe

A press conference will be held Wednesday to announce charges against seven investment professionals who participated in an insider trading scheme that allegedly netted more than $61.8 million in illegal profits based on trades of a single stock.

Some arrests have already taken place. Todd Newman, who once headed technology trading for Diamondback Capital Management was arrested in Boston this morning. Newman was placed on a leave of absence in 2010 and subsequently let go by that firm.

A second individual, Anthony Chiasson, who co-founded the Level Global Investors hedge fund, is expected to surrender in New York later this morning.

A source close to the case told CNBC that FBI officials have also arrested John Horvath of Sigma Capital. Sigma is part of hedge fund giant SAC. Representatives from SAC did not have immediate comment.

A fourth defendant, Dan Kuo of Los Angeles-based Whittier Capital was also arrested Wednesday.

Today’s arrests are part of a four-year investigation by the FBI of insider trading in the hedge fundindustry dubbed “Perfect Hedge.” The first trial in the investigation involved billionaire hedge fund mogul Raj Rajaratnam, who was found guilty and sentenced to 11 years.

See the complaint filed against Newman, Chiasson, and Horvath, Kuo, and view a list of insider trading defendants since August 2009.

—Reuters contributed to this report.