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FBI Pulls Off ‘Perfect Hedge’ to Nab New Insider Trading Class

The New York field office of the FBI sits a block west of Foley Square, where Roman and Greek-inspired courthouses with four-story colonnades loom over a small town of judicial institutions in which the biggest of America’s financial crimes are prosecuted.

Almost five years ago, in a conference room 23 stories above the plaza, FBI agents David Chaves and Patrick Carroll surveyed the midtown skyline to the north, home to much of the world’s financial industry. They had received some disturbing intelligence: a surge in profits at hedge funds might be the result of an epidemic of insider trading.