The Passion Of The Preet

Did Bharara the Insider Slayer lose the chance to prosecute the case of a lifetime?
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When Preet Bharara got the axe alongside 45 other U.S. attorneys last week, he signed off with a rather pungent tweet: “Now I know what the Moreland Commission must have felt like.” That comment – which referenced the New York ethics commission Governor Andrew Cuomo prematurely aborted when it got too close for comfort – incited all sorts of speculation. Was he on the trail of some big shot? Was there political motivation the Trump administration's decision to can Bharara despite a gentleman's agreement back in November to keep him? Did he get rat-fucked?

PreetThirsty

Well, there's this:

Former U.S. Attorney Preet Bharara, who was removed from his post by the Trump administration last week, was overseeing an investigation into stock trades made by the president’s health secretary, according to a person familiar with the office.

Health Secretary Tom Price, you'll recall, got discounted offers on the stock of a company that would directly benefit from legislation Price introduced, among other insider-y dealings. He got confirmed anyway. Who would have known that Preet, the bane of insider traders everywhere, was on the case?

The investigation of Price’s trades by the U.S. Attorney’s Office for the Southern District of New York, which hasn’t been previously disclosed, was underway at the time of Bharara’s dismissal, said the person.

That would have been a juicy case for old Preet. Hopefully he can distract himself from the pain of losing his office with some other pursuit.

Fired U.S. Attorney Preet Bharara Said to Have Been Investigating HHS Secretary Tom Price [Pro Publica]

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Preet Bharara: University Of Michigan Doctor Financially Compensated For Leaking Confidential Drug Trial Data To Former SAC Trader Just An Innocent Pawn In Big Bad Hedge Fund's Game

As you may have heard, earlier today, Mathew Martoma, a former portfolio manager in SAC Capital's CR Intrinsic unit, was charged with allegedly running “the most lucrative insider trading scheme ever," netting $276 million for the fund. He did so based on information that was given to him by Sid Gilman, a University of Michigan neurologist and chair of a "safety-monitoring committee that oversaw a clinical trial by Wyeth LLC and Elan Corp.  into whether the drug bapineuzumab, or bapi, was safe for patients with mild-to-moderate Alzheimer’s disease." Over an 18-month period, Gilman and Martoma met 42 times, in addition to emailing and chatting over the phone. For example:

Members Of Insider Trading "Club" Were Good At Obtaining Material Non-Public Information, Not So Good At Playing It Cool On Conversations Recorded By The Feds

Later this week, Anthony Chiasson, a Level Global co-founder, and Todd Newman, a former Diamondback portfolio manager, will go to trial in Federal Court for allegedly making $67 million in ill-gotten gains, based on inside information they obtained about Nvidia Corp and Dell Inc. According to U.S. Attorney Preet Bharara, Chiasson and Newman, who've both pleaded not guilty, were able to rack up all their profits by teaming up with a bunch of friends and forming an insider trading club, which is a lot like a book club or fight club in that they took roll, traded canapé duties, and drank Pinot Grigio, but different in that instead of discussing The Art Of Fielding or punching each other in the face, they spent every Monday night from 7 to 9 sharing material non-public information with each other. “This case describes a tight-knit circle of greed on the part of professionals willing to traffic in confidential information,” Bharara said when the charges were announced in January. “It was a circle of friends who essentially formed a criminal club, whose purpose was profit and whose members regularly bartered inside information.” In the beginning, when the club was first formed, there was a spirit of camaraderie, as the club members happily traded tips for everyone's mutual benefit. Unfortunately, things started to break down when some people agreed to cooperate with the government by recording their friends admitting wrongdoing, in exchange for leniency. Former Diamondback analyst Jesse Tortora, for instance, gave fellow club member Danny Kuo a call at the direction of the FBI on December 1, 2010, a conversation that Chiasson and Newman's lawyers are trying to use as evidence that Tortora, who will be testifying against them, lacks credibility, based on the fact that when asked by Kuo if his phone was being tapped, Tortora didn't say "Yup! Helping the Feds build a case against you, actually." “What’s happening, man?” Tortora asked during the call, according to a transcript prosecutors submitted to the court. “Dude, is your phone tapped?” Kuo replied. “Wait, is the phone tapped?” Tortora asked, adding, “Why do you ask that?” Despite losing major points for repeating the question-- you never repeat the question!-- and the extremely unconvincing "Oh, why do you ask" attempt to act natural and not like he was working for the government, Tortora ultimately recovered. After Kuo and Tortora discussed defense strategy to explain their trades were made after legitimate research, Kuo concluded the call with a final warning to Tortora about making future calls from a personal telephone, according to the transcript. “I would seriously invest in some quarters, and start calling from 7-Elevens,” Kuo said. Hedge Fund Founder Faces Jury as FBI Raids Yield Trial [Bloomberg]