"We have been remarkably successful in convincing persons to cooperate with the government, and provide evidence to us, and in court of law," SEC director of enforcement Robert Khuzami said during a press conference the day the government went public with its charges of insider trading against former SAC Capital employee Mathew Martoma. To the untrained ear, Khuzami probably appeared to be speaking to no one in particular, just sending a general message to any would-be criminals out there that once the government got to their co-conspirators, it'd be all over. No one wants to do time, and everybody flips. To those who've been following Operations Perfect Hedge, though, and have watched the Feds' relentless pursuit of Steven A. Cohen,  it was obvious they were sending a clear message to the Big Guy: "We got ya boy, and ya goin' down." And since its track record of getting people to turn on their colleagues and in some cases, their best friends (see: Noah Freeman/Donald Longueuil, and these guys, and these guys, and this guy) really has been "remarkably successful," and since Martoma has a wife and two young kids and his whole life ahead of him, Khuzami and Co. probably assumed they had this one in the bag. But not so.

Earlier today, Bill Hwang, the founder of the Tiger Cub's Asia-based branch, Tiger Asia, pleaded guilty to one count of wire fraud and agreed to fork over $44 million to make allegations by the SEC of insider trading in Chinese bank stocks go away. According to Hwang, his firm "regrets the actions for which is accepts responsibility today and is grateful that this matter is now resolved." According to SEC director of enforcement Robert Khuzami, who we would love to consider a side job writing fables for children* about foxes who trade on unreleased information about clinical trials of Alzheimer's drugs and take advantage of innocent hens, Hwang was a very bad boy and should serve as a cautionary tale for anyone thinking about breaking the law.

If you are a hedge fund manager who goes by the name Steven A. Cohen, there are a few things you really don't want to hear first thing in the morning. They include: a) "You might not want to put that whiteboard marker in your mouth" b) "The fleeces are on back order" c) "Your ex-wife is in the lobby" d) "There's a photographer here who said he's been authorized to shoot you wearing a king's robe and crown for a set of playing cards" e) "You've been outmaneuvered for the Toledo Mud Hens. But I hear the Binghamton Mets may be available." f) "One of your former employees told the FBI you regularly trade on material non-public information." No one has sodomized anyone with any foreign objects lately, the supplier got the message ("That shipment will be here in the next hour or you'll find out what it's like to be dragged down the BQE via Zamboni") loud and clear, Patty C is sitting this round out, photoshoots have been banned, and baseball in general can go fuck itself, so the mood at 72 Cummings Point Road today can likely be attributed to this: A former SAC Capital Advisors LP portfolio manager told the FBI it was “understood” that those assigned to give their best trading ideas to founder Steven A. Cohen would provide him with insider information, according to an agent’s notes of the conversation. The former fund manager, Noah Freeman, pleaded guilty to securities fraud in February 2011 after speaking to Federal Bureau of Investigation agents and federal prosecutors in New York in late 2010, in a so-called proffer session. Defendants use such sessions to determine whether to cooperate with the government against others. “At SAC Capital you were expected to provide your trading ideas to Cohen,” Freeman said, according to a Dec. 16, 2010, memo written by FBI Special Agent B.J. Kang. “Freeman and others at SAC Capital understood that providing Cohen with your best trading ideas involved providing Cohen with inside information.” Doesn't sound good! But before anyone launches himself into space in a rocket disguised as a Bob's Big Boy statue, let's stop to consider that: 1) The person who made this claim is Noah 'Judas' Freeman, the ex-SAC employee who recorded Donald Longueuil-- his closest friend, best man, and the guy who "helped Freeman get out of bed in the morning" during a bout of crippling depression he suffered after being dumped by his previous fiancée-- admitting to destroying evidence of the insider trading they both took part in in order to save himself and not have to eat the cost of the Puerto Rican vacation he'd booked months earlier, i.e. a person looking out for number one and number one only, who seems like he would probably say anything if he thought it was in his best interest.* 2) According to Bloomberg, "Freeman isn’t quoted as saying Cohen, 56, knew the information came from illegally obtained tips, ordered him to provide them or traded on the data," and unless someone can get their hands on the unofficial company handbook that includes a chapter on the burly-looking man who stops employees approaching the boss with an idea to say "If you violated any fewer than five securities laws in getting this information, don't waste his fucking time," proving that there was an unwritten, unspoken expectation that "the trading ideas involved dirty information," based on one crooked guy's claim, seems difficult. Having said all that, if it turns out four other people come forward to confirm Freeman's claim, or if he also wore a wire when chatting up Cohen, as he did with Longueuil, and got Cohen to go into great detail re: the wink-wink policy at the firm, that would be less than great and would probably have the potential to take over for the worst day of the Big Guy's life. But hey, no more forced sodomy on the trading floor! That's something! Ex-SAC Capital Manager Tells FBI Fund Used Insider Data [Bloomberg] Earlier: Donald Longueuil And Noah ‘Judas’ Freeman: A Bromance Betrayed *Re: Going on vacation, not going to prison.

As you may have heard, in addition to the salary he was paid by the University of Michigan, Dr. Sidney Gilman made about $100,000/year through his side-gig advising "a wide network of Wall Street traders."  That network included included Mathew Martoma, recently charged with running “the most lucrative insider trading scheme ever,” based on the information he received from Gilman, who made it a habit of leaking highly confidential information to the former SAC Capital employee. While most people that engage in fraud can't help but spend their ill-gotten gains in a flashy way that attracts unwanted attention (expensive cars, private jets, chinchilla fur coats) the Times reports that Sid Gilman's supplementary income "was not readily apparent in his lifestyle in Michigan." For instance, no second home and no bragging to his colleagues about his life on Wall Street. Still, on at least one occasion, the doctor couldn't help but let the underage girl sitting next to him on a flight home know that she was in the presence of a BSD.

Take note, insider-traders and those who might be accused of it in spite of their innocence: If you wear a wire and you don't have to go to jail. Wesley Wang, the former SAC analyst who helped convict one former boss and is probably helping to build cases against his bosses at SAC and Trellus Management, will get to keep doing so from the comfort of his northern California home.

Unclear but, based on recent reports, very possible. If you can come up with another idea re: how the "intimidating Cohen has become even more intimidating" in the wake of MartomaGate, we're all ears.