More insider trading arrests

NEW YORK (Reuters) – At least two senior hedge fund employees were being arrested as part of the government’s sweeping probe into insider trading, people familiar with the matter said on Wednesday.

The arrests reflect a widening of the government’s long-running probe into the alleged sharing of confidential information on publicly traded corporations with hedge fund managers and analysts. In the biggest case so far, onetime billionaire Raj Rajaratnam was convicted of insider trading and is now serving an 11-year prison term.

Anthony Chiasson, who co-founded the Level Global Investors hedge fund, is among those expected to face charges, and is turning himself in to authorities, one of the people said.

Todd Newman, who headed technology trading for Diamondback Capital Management from Boston, has also been arrested, another person said.

Newman had been placed on leave of absence in 2010 and subsequently was let go by that firm. Reuters in November reported the government’s interest in Newman.

Overall, charges against at least four people are expected to be unveiled on Wednesday, the people said. The charges are expected to be filed in U.S. District Court in Manhattan.

Jon Horvath, who is currently employed at Sigma Capital Management, a unit of Steven A. Cohen’s $14 billion hedge fund SAC Capital, was also arrested, one of the people said. A spokesman for SAC Capital could not immediately be reached for a comment. The identity of the fourth person could not immediately be confirmed.