Billionaire investor Raj Rajaratnam and present and former executives of Bear Stearns, IBM, Intel and McKinsey were charged on Friday in an alleged insider trading scheme that US prosecutors called the biggest ever involving hedge funds.

In a possible sign of escalating federal efforts to uncover white collar crime, Preet Bharara, US attorney in Manhattan, said the case marked the first time court-authorised wire taps – a traditional tool of investigators pursuing mob bosses and drug kingpins – had been used in a significant insider trading case.