Wesley Wang, a former analyst for the $14bn hedge fund SAC Capital, has named 20 people who traded on inside information, including some subjects of the US government’s wide-ranging investigation who are yet to be charged, according to prosecutors.
Mr Wang, who last year pleaded guilty to passing on illegal tips while working at SAC and another hedge fund, Whitman Capital, is due to be sentenced on Wednesday.
Pointing to the possibility of further arrests, prosecutors say in a letter to Judge Jed Rakoff, of the Southern District of New York, who will carry out the sentencing: “The full extent of Wang’s information and co-operation remains to be realised.”
Prosecutors said Mr Wang’s co-operation, which included recording meetings and phone calls with several targets of the investigation, had already “contributed substantially to the criminal convictions of over 10 individuals”, and asked that his continued co-operation be a condition of any probation imposed by the court.
The letter again places Steven Cohen’s SAC, the most profitable hedge fund in 2012, according to Bloomberg, and one of the most successful hedge funds of all time, at the heart of a probe into insider trading on Wall Street.
Mr Wang last year pleaded guilty on two counts of insider trading as part of an agreement with prosecutors to testify against Doug Whitman, the founder of Whitman Capital, who was convicted of conspiracy and securities fraud.
Mr Wang also pleaded guilty to passing inside information to Dipak Patel, a portfolio manager at SAC who has not been charged or accused of wrongdoing. SAC declined to comment.
In November SAC told its investors that it had received notification that the Securities and Exchange Commission planned to bring civil fraud charges against it – a procedure known as a Wells Notice. The firm said that it had acted appropriately and would bear all legal costs. February 15 is the first deadline for SAC investors to request the return of their capital since that notification.
Portions of the prosecutors’ letter, including part of the description of Mr Wang’s alleged criminal conduct while working at an SAC subsidiary between 2002 and 2005, were redacted.
The letter said Mr Wang’s co-operation had enabled the FBI to pursue its investigation with “tremendous success”.
It also said that he had helped “despite dealing with some personal hardships” including flying across the country to meet prosecutors while his dog recovered from surgery. At the time, the letter said, the dog was “Mr Wang’s primary companion”.