Michael Douglas is playing a new and unlikely role as spokesman for the U.S. Federal Bureau of Investigation in its war against corruption on Wall Street.
The Hollywood actor – famous for his line “greed is good” in the 1987 film Wall Street – is sending a new message in a public service announcement, telling traders and brokers that insider trading is a serious crime.
The FBI’s New York office, which prioritizes white-collar crime, hopes the 60-second segment will reach traders and hedge fund portfolio managers who might be tempted to cross the line between trading on legal stock research and trading illegally on secret, non-public information.
David Chaves, the FBI supervisor who oversees insider trading investigations and conceived of the public service announcement, said the advertisement was designed to be “a big deterrent for people who are on that line – that’s our goal here.”
Mr. Chaves contacted Mr. Douglas, who won an Oscar for his Wall Street role as Gordon Gekko, because of the film’s symbolism. The segment was filmed at the Trump International Hotel in New York.
The FBI has not bought advertising slots to air the announcement, but expects it will be shown on cable channels and news outlets. The campaign will be followed by a working group that the FBI hopes to convene in April with compliance officers, lawyers and fund managers.
Since it launched an offensive codenamed Operation Perfect Hedge in 2007, the FBI has deployed a range of tactics to investigate insider trading, including the use of wire taps to capture hedge fund traders’ conversations with analysts, company insiders and consultants.
Those tactics were on display during last year’s trial of Raj Rajaratnam, the Galleon Group co-founder, during which government prosecutors played hours of secretly recorded phone conversations. Mr. Rajaratnam was convicted and is serving an 11-year prison sentence.
The FBI said traders are changing their tactics and using social media to pass information.
Richard Jacobs, an FBI supervisor, said insider trading is a “systemic” problem and the agency “will go to whatever lengths we have to to keep up with changes in technology and methods.”
Since 2009, the FBI and U.S. attorney’s office in Manhattan have announced convictions against more than 50 individuals for insider trading. During that same period the FBI said it identified more than 300 people who are subjects or targets of their investigation.
The dawn arrests of billionaire traders sent shock waves across Wall Street, causing some hedge funds to hire private security companies to sweep their homes and offices for listening devices. The FBI hopes the Michael Douglas PSA will have an additional effect.
“We’re still developing cases so clearly there are people who are still breaking the law, but we’re gratified in the feedback that we’re hearing from co-operators,” Mr. Chaves said. “People are very, very aware of the FBI’s presence on Wall Street.”