As U.S. Attorney for the Southern District of New York, Preet Bharara has made insider trading a top priority of his office. By bringing charges and winning convictions against executives at the highest levels of finance, he has propelled the issue back into the public consciousness.
He's won 52 insider trading convictions so far in his two and a half years in his job, one of the most powerful prosecutorial positions in the nation, with 220 attorneys and a $50 million annual budget. More than two dozen of those cases were related to the hedge fund firm Galleon Group. In October, he filed insider trading changes against Rajat Gupta, a board member at The Goldman Sachs Group Inc., alleging that he had shared confidential information with Galleon's founder, Raj Rajaratnam, who recently began serving an 11-year sentence.
“Insider trading of the type and nature that we have now charged dozens of times over is an insidious offense — it neither advances the market nor is it victimless nor does it fall into a hazy gray area,” Mr. Bharara told the New York Financial Writers Association in a June speech. “Insider trading saps market confidence, cheats average investors and victimizes the companies whose secret information is so often stolen in the scheme.”
Mr. Bharara, 43, may be even more influential in finance in the next few years. He is one of only a handful of government prosecutors with the stature and resources to bring the kind of case for which the public has been clamoring: one that holds a major institution or executive accountable for the financial crisis. His office is up against a five-year statute of limitations.
In the world of law and politics, Mr. Bharara qualifies as something of a celebrity. The chief federal law enforcement officer for eight counties, including New York, he's been called the Sheriff of Wall Street, and Preet the Enforcer. His friends describe him as approachable, level-headed and witty.
“I hear that he's one of the last to leave, and he walks the halls of the office, getting to know the line prosecutors,” said Joon Kim, a former assistant U.S. attorney who is now a partner at Cleary Gottleib Steen & Hamilton LLP.
Born in India to parents who emigrated when he was 2 years old, Mr. Bharara was reared in suburban New Jersey. His brother is a multimillionaire who sold an Internet diaper business to Amazon.com — an event that serves as the punch line for some of Mr. Bharara's self-deprecating jokes about which brother is more accomplished.
A graduate of Harvard University and the Columbia School of Law, Mr. Bharara worked in private practice until 2000, when he joined the U.S. Attorney's Office. In 2005, he went to Washington as chief counsel for Sen. Charles Schumer, D-N.Y., who was head of the Senate Judiciary Committee. There, Mr. Bharara led the investigation into the firing of eight U.S. attorneys, which led to the resignation of Attorney General Alberto Gonzales. Mr. Schumer recommended Mr. Bharara for the U.S. attorney job, and he was appointed in February 2009.
In October 2009, his office filed the insider trading charges against Galleon Group, having used wiretaps in the investigation, an innovative — and controversial — move that a writer for The New York Observer said struck fear into the offices of financial firms around the city.
Mr. Bharara's focus on insider trading is an example of keen political instincts. He's been able to tap in to the public's thirst for retribution in the financial crisis, even though the Galleon case actually predates the meltdown, said Dan Richman, a law professor at Columbia.
In addition to insider trading, Mr. Bharara has won major counterterrorism cases, including the conviction of the Times Square bomber, Faisal Shahzad. He's also investigated corruption in New York state government.
Whether he uses his political instincts in an even wider arena remain to be seen. The office of U.S. attorney has launched other lawyers, including Rudy Giuliani, into even more-prominent jobs.