For the general public, this news will reaffirm the popular view of hedge funds as shadowy entities skirting or breaking the rules and reaping illegalgains.
The government accused Galleon Group titan Raj Rajaratnam of using an illegal network of sources to earn millions in illegalgains while defense lawyers countered the claims saying their client traded stocks on public information and not insider tips.
It can seek disgorgement of ill-gotten gains, federal court injunctions and cease-and desist orders against illegal securities conduct, and bars against working for broker-dealers, investment advisers, transfer agents, and municipal securities advisers.
The original purpose of anti-money-laundering laws was to reduce the incentive for illegal behavior by making it more difficult for crooks to enjoy their ill-gotten gains.
Such activities aren't illegal in China, but they are prone to abuse as some traders might seek to exploit the trades for personal gains, the people said.