Ilya Marritz covers business for WNYC.
The FBI is seeking to raise its profile as an enemy of financial crime — and not just fighters of terrorism — with the release Monday of a public service announcement featuring an actor who played a famous Wall Street villain.
Michael Douglas, who memorably portrayed ruthless stock broker Gordon Gekko in “Wall Street” in 1987, appears in a video released Monday that urges viewers with knowledge of insider trading to contact the FBI.
"Our economy is increasingly dependent on the success and integrity of the financial markets,” Douglas said. “If a deal looks too good to be true, it probably is.”
More than 50 agents in the New York bureau are currently focused on financial crimes and their probes. Relying heavily on wiretaps, the FBI has made dozens of arrests, resulting 59 convictions since the insider trading probe began.
"We started with baby steps,” said Dave Chaves, a special agent with the Bureau. “We're kind of leaping at this point, but I believe insider trading has been pervasive for years,"
In 2007, the Bureau received reports suggesting some hedge funds were trading inside information, but agents had difficulty recruiting informants. Eventually, the FBI resorted to a tactic normally reserved for mob cases: wiretaps. The operation was dubbed “Perfect Hedge” roughly three years ago.
The effort began to pay off with a string of arrests in 2009, including that of Raj Rajaratnam, the former billionaire hedge fund head of the Galleon Group.
Last year, Rajaratnam was convicted on 14 counts of fraud and conspiracy. This spring, Rajat Gupta, a former director of Goldman Sachs, will face accusations he passed secrets to Rajaratnam.
FBI investigators are working closely with federal prosecutors in the Southern District of New York, led by Preet Bharara, and the Securities and Exchange Commission.
While surveillance of phone lines has supplied much of the evidence to obtain convictions, the FBI is looking for more tip-offs from informants.
In the aftermath of the 2008 market crash, authorities claimed they were bringing Wall Street criminals to justice. However, the hedge fund industry had little to do with the financial meltdown, which began with the subprime mortgage crisis.
Chaves, who approached Douglas about doing the PSA, said the FBI was “very pleased” when the actor accepted the role. But it’s possible Douglas also wanted to set the record straight about the character infamous for uttering the phrase: "Greed, for lack of a better word, is good. Greed is right."
On a recent Here’s the Thing With Alec Baldwin podcast, Douglas complained he is often accosted by people who misunderstand Gekko's character.
"If I get one more drunken guy from the street going, 'Hey man! Greed is good. You're the man! You're why I got into this business!'" Douglas said, "and I'm going, 'Hey, I'm the villain.'"