Last summer, 400 finance types gathered to hear Preet Bharara, the top federal prosecutor in Manhattan, speak at a conference at The Pierre hotel.
He surveyed the investors, traders and analysts assembled in the gilded main ballroom and remarked that the crowd was larger than he had expected. “So I just wanted to apologize in advance that I don’t have enough subpoenas for all of you,” he said.
The audience roared with laughter and surprise.
“Obviously, I’m kidding,” Mr. Bharara added in a reassuring tone. There was the briefest of pauses. “I do have enough,” he said.
The man who has sent more financiers to jail than anyone else since the 1980s is disarmingly funny. He also has a mild addiction to diet soda and an innate urge to interrogate.
Arriving at a Tribeca restaurant on a recent January afternoon, Mr. Bharara begins peppering me with questions before we can even slide into a corner booth. The tone is friendly, not pushy, but the grilling continues for nearly 10 minutes.
Since 2009, Mr. Bharara has led the largest campaign against illegal insider trading in a generation or more. To date, more than 70 people have been convicted on criminal charges. They range from lowly junior analysts to Raj Rajaratnam, a billionaire hedge fund manager. Many were betrayed by their own words caught on secret government wiretaps, a tactic previously reserved for mobsters and drug dealers.
The investigation into insider trading is at best tangential to the financial crisis. But it burst into the public eye at a time when Americans craved accountability, and in particular, proof that rich and powerful people are not beyond the law. Enter Mr. Bharara, who managed to secure prison sentences for several such individuals.
Add to the mix the fact that Mr. Bharara – born in India but raised in New Jersey – is the embodiment of immigrant achievement and it’s easy to understand why he has achieved semi-rock-star status. Last year, the 44-year-old appeared on the cover of Time Magazine with the headline, This man is busting Wall St.
Other tributes were more unusual. At a Bruce Springsteen concert last October, the musician dedicated a song to Mr. Bharara, who was in the audience with his young son (the relevant lyric: “Send the robber barons straight to hell.”) When he heard his name uttered by The Boss , Mr. Bharara said his reaction was “complete muscular paralysis.”
Wearing a charcoal grey suit and a red-and-pink striped tie, Mr. Bharara fits right in at City Hall restaurant, a favourite with judges and lawyers from the nearby federal courthouse. It is past lunchtime and he declines the offer of food. He isn’t a big midday eater and appears to subsist on Diet Coke. He promptly orders one, the first of three. With the authority of a connoisseur, he informs me that, for the best taste, glass bottles trump aluminum cans.
I ask him about the sheer number of insider trading cases he has pursued and what that tells us about the financial industry. When people believe the authorities aren’t paying close attention, he says, a culture can develop where the attitude is “very cavalier and casual about bad conduct.” So a prosecutor’s job is to change that calculus.
If engaging in wrongdoing means running the risk not simply of paying a fine, but spending “time away from your children and your spouse and your family and open air, behind bars, for a long period of time – that, I think, severely alters the risk analysis,” he says dryly.
What connects the insider-trading investigation to other recent financial scandals is a “degradation of corporate culture,” Mr. Bharara says. He isn’t much impressed when executives tell him about their expensive systems to avoid regulatory infractions and worse. Such compliance programs and teams of in-house lawyers are necessary but not sufficient in his opinion.
He has a modest suggestion. Employers should make it a habit to say, “One thing you should know about this place is we do not cheat, we do not steal, and if you do, you’re going to be out on your behind,” Mr. Bharara says. Too many companies, he says, eschew such statements of principle in favour of “fancy legal mumbo jumbo.”
Warming to his theme, he adds: “Very basic things that people learn in their own families about what’s right and what’s wrong and what’s good and what’s not” also apply in a corporate setting. But instead, some businesses consider such messages “too simplistic, and I don’t think it ever is.”
He stops abruptly, as if he has somehow revealed too much, and changes the topic. “What does it take to get another Diet Coke around here?” he asks, peering around for our server, who has vanished.
The exchange brings to mind a description of Mr. Bharara courtesy of one of his friends, who told me that in matters of character, he was “straight as a Nevada highway.”
Although his default mode is prosecutorial tough talk, he is equally at home with witty self-effacement. He credits his mother with orchestrating his coverage in the press (“She gets to everybody,” he quips). And he claims any effectiveness as a manager – he oversees an office of 230 prosecutors – is due entirely to the fridge he keeps stocked with his preferred caffeinated beverage. On occasion, he has substituted a case of Diet Mountain Dew, he admits, wondering aloud whether that makes him look unhip.
Keeping a sense of humour is one way Mr. Bharara alleviates the daily pressure of what is a deadly serious business. As the U.S. Attorney for the Southern District of New York, Mr. Bharara’s job is to prosecute cases involving violations of federal law. That means pursuing not just crooked traders and cybercriminals but also Mafia dons, gang leaders and terrorists. Mr. Bharara’s office locked up Faisal Shahzad, who attempted to detonate a car bomb in Times Square in 2010, and Viktor Bout, a notorious Russian arms dealer.
Caution comes with the territory. In conversation, Mr. Bharara is amiable but also careful not to share too much. He is wary of putting details about his family into the public realm, a kind of circumspection that is understandable for any high-profile prosecutor.
Mr. Bharara’s own story is remarkable enough. Born in the Indian state of Punjab – his full name is Preetinder – Mr. Bharara arrived in the United States at the age of two. His family lived briefly in Buffalo, where they developed an enduring affection for both sides of Niagara Falls, before settling in New Jersey.
His father, whom Mr. Bharara has called a “Tiger Dad,” pushed both of his sons to excel. Mr. Bharara attended Harvard and then Columbia Law School. His younger brother Vinit is no slouch: Trained as a lawyer, he became an entrepreneur, and in 2011, the e-commerce company he co-founded was sold to Amazon.com for $540-million (U.S.).
Meanwhile, Mr. Bharara wasted little time climbing the legal ladder. In 2005, he moved to Washington to become chief counsel for Senator Charles Schumer, a New York Democrat.
In the capital, Mr. Bharara won praise for his even-handed approach in a highly sensitive congressional investigation, but the hyperpartisan atmosphere left him cold.
One day, he remembers, he was heading to lunch with someone. The person asked him whether a rumour was true: that Mr. Bharara, a Democrat, was friends with Viet Dinh, a Republican formerly in a senior position in the U.S. Justice Department. “Yes,” Mr. Bharara replied, “I was the best man at his wedding.” The person Mr. Bharara was talking to “actually physically recoiled,” he recalls. “I never forgot that.”
There is feverish speculation about Mr. Bharara’s next move. “People are pushing him to do a lot of things,” says Mr. Dinh, who remains his best friend. Previous occupants of Mr. Bharara’s job, like Rudy Giuliani, have gone on to run for office. Others have pursued a lucrative career in private practice or moved into senior positions in the Justice Department.
Mr. Bharara says he has no desire to return to Washington and no plans to seek elected office. When I persist, asking whether he would return to the capital if asked, he laughs and protests. “I’m hoping to do this job for about a million years,” he says.
That emboldens me to ask one of my final questions. Can we expect another prosecution of a high-profile figure in the insider-trading investigation? It’s perfectly clear who I’m talking about: Steven Cohen, the billionaire and hedge-fund legend who founded SAC Capital Advisors. At least eight current and former employees of Mr. Cohen’s firm have been tied to alleged insider trading. Mr. Cohen has said that he acted properly at all times.
“We didn’t get everybody?” Mr. Bharara says, jokingly.
There are a few beats of silence as I wait for an answer to my question.
Just as I am about to move on, Mr. Bharara simply says, “Stay tuned.” Which could mean nothing. Or the opposite.
IN HIS OWN WORDS
On the paucity of criminal prosecutions in the wake of the financial crisis:
“The system being what the system is, you can only proceed when you have confidence that you have proof beyond a reasonable doubt that you can convince 12 jurors to unanimously agree on. The one thing that people should appreciate – I’m speaking from my office, but I’m sure this is true of every office – is we’re not afraid of anyone, no matter how big they are or how wealthy they are.”
The best advice he received before starting this job:
“I got a lot of good advice from a lot of people. This may sound cliché, but this job, uniquely among jobs, I think, is all about doing the right thing. If you ever have a qualm or feel any queasiness about a course of conduct, about bringing a case, or about whether or not something should be disclosed or how you should proceed, then you shouldn’t do that thing. I sleep pretty comfortably every night.”
On public service:
I’ve always thought that the best thing you can do if you have a lot of privilege, as I’ve had – my parents didn’t, but I did – is to give back to the country that gave you so much. … I’ve said to my children, you don’t have to spend your whole life in public service, but you can spend some time. I like to suggest to law students – ‘You’re going to have a long career. For some portion of your career, if would be nice to do something that was larger than yourself, larger than just making a buck. And you’re enriched by it and your community is enriched by it.’”
Born in Ferozepur, India, 1968.
Attended Harvard University, Cambridge, Mass.; and Columbia Law School, N.Y.
Married, three children.
Lives in Westchester County, N.Y.
1993-1996: Lawyer at Gibson Dunn & Crutcher.
1996-2000: Lawyer at Swidler Berlin Shereff Friedman.
2000-2005: Assistant U.S. Attorney, Southern District of New York.
2005-2009: Chief counsel to U.S. Senator Charles Schumer.
2009-present: U.S. Attorney for the Southern District of New York
Editor's Note: Viet Dinh served as a senior official in the United States Justice Department from 2001 to 2003. His friend Preet Bharara, now the top federal prosecutor in Manhattan, arrived in Washington in 2005. An earlier version of this story incorrectly stated that Mr. Dinh's stint at the Justice Department was concurrent with Mr. Bharara's time in Washington.