The U.S. Securities and Exchange Commission brought more sensational insider trading allegations against Wall Street Thursday.

The SEC charged a pair of lawyers, claiming that they tipped inside information in exchange for kickbacks, and it brought allegations against six Wall Street traders and a proprietary trading firm, that it claims was involved in a US$20 million insider trading scheme. It also alleges that downstream tippees included two hedge funds that collectively made more than US$10 million in profits trading on these tips.

Separately, the commission also announced additional charges against 13 individuals and firms in its existing insider trading enforcement action against hedge fund manager Galleon Management LP, and its founder Raj Rajaratnam.

None of the allegations have been proven in these various cases.

“When Wall Street professionals or others exploit inside information for an illegal tip-and-trade binge, they undermine the level playing field that is fundamental to our capital markets,” said Robert Khuzami, director of the SEC’s Division of Enforcement. “These defendants thought the rules that apply to all investors did not apply to them, but the one rule they cannot avoid is the rule of law. Now they face financial penalties, industry bars, and possible jail time for their indiscretions.”

The Schottenfeld Group, whose former employees were caught up in both sets of allegations released today, issued a statement, saying, “We are deeply troubled and shocked by the criminal allegations made today against former employees of our firm. These individuals have not been affiliated with the firm for nearly two years. None of the principals nor any present employees of the firm have been named in connection with this criminal investigation. We plan to cooperate fully and completely with the authorities in their investigations of this matter.”

IE