The arrest on charges of insider trading of Raj Rajaratnam, the billionaire founder of the Galleon hedge fund, heralds laudable prosecutorial zeal to enforce criminal law in the financial sector. But this effort must not be confused with what the regulations governing hedge funds ought to be.

Court documents allege that Mr Rajaratnam and his associates illegally used information from corporate insiders to place trades before market-sensitive announcements. If the claims are true, the scheme’s reach into the cathedrals of corporate capitalism was nothing short of spectacular: a McKinsey director and an IBM senior vice-president are among those charged. The investigation will, if nothing else, have the salutary effect of reminding everyone that no one is above suspicion.