Insider trade probe widens

City A.M. Reporter
US authorities have expanded an investigation into insider trading on Wall Street, bringing to more than one dozen the number of subpoenas sent to hedge funds and other investment firms over the past two weeks.

The new subpoenas signalled an intensification of one strand of the investigation, which focuses on funds that did business with so-called expert network firms. Those firms help investment managers meet industry experts to research a specific industry.

US stocks, which had broadly rallied earlier in the day after President Barack Obama agreed to extend Bush-era tax cuts, retreated after news of the new subpoenas surfaced.

Last week, federal prosecutors in Manhattan are believed to have sent more subpoenas to several large hedge funds.

US authorities began subpoenaing big-name investors, including Wellington Management and SAC Capital Advisors, on 22 November, the same day FBI agents raided hedge funds in three states.

Meanwhile, gold, silver and copper all hit new highs as the prospect of a further round of quantitative easing in the US sparked fears of a weakening dollar.