On Bloomberg BusinessWeek, Devin Leonard has posted a terrific article that takes readers inside the Galleon insider trading probe through the eyes of Sanjay Wadhwa, the SEC's lead lawyer on the case. The article follows Wadwha from the moment he discovered oddly synchronized trading between Raj Rajaratnam and his brother, and all the way through the filing of criminal and civil charges in the case years later.

The article also does a great job of describing the environment that Wadhwa and his fellow SEC enforcement lawyers have worked in through recent years, and discusses many of "the SEC's challenges: its complacent culture, its Byzantine bureaucracy, and its statutory weaknesses." Among the challenges in the Galleon case was that although the DOJ was creating incriminating wiretaps of Rajaratnam's conversations, federal law prohibited the SEC from listening to the wiretaps. 

“I don't mean this in a dismissive way,” Wadhwa says. “But the U.S. Fish and Wildlife Service has access to wiretaps, but the SEC doesn't? And somehow you expect us to oversee Wall Street? There has to be some relationship between the responsibilities and the tools.”

The article also points to some of the effective structural changes in the Enforcement Division under the leadership of Mary Shapiro and Robert Khuzami (such as far less bureaucracy to obtain a subpoena, for example). According to former SEC Chairman Arthur Levitt, these changes have helped "diminish[] the gap between regulator and regulated from a chasm to just a normal-sized gap.”

Read the full article here. Highly recommended.

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