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World

Bharara nets new high profile case
Reuters
New York, April 03, 2013
First Published: 12:04 IST(3/4/2013)
Last Updated: 21:34 IST(3/4/2013)
US attorney for the Southern District of New York Preet Bharara holds a news conference in New York. Reuters

Manhattan US attorney Preet Bharara has proven adept with the media, landing on the cover of Time magazine and being named the latest "Sheriff of Wall Street" by the financial press.


The chief federal prosecutor for the Southern District of New York was back in the limelight on Tuesday, announcing charges against state senator Malcolm Smith, a Democrat, and five other politicians in a plot to buy his way onto the New York City mayoral ballot as a Republican.

The latest headline-grabbing case from an office that has won more than 70 insider trading convictions since Bharara started in August 2009 has refueled speculation he might leverage his post for higher office.

"If he does indeed have political ambitions, this kind of case is almost a perfect case," said Douglas Muzzio, a political science professor at Baruch College in New York. "Clearly, having a couple of politicians' scalps on your prosecutorial belt helps."

Bharara's predecessors include Rudolph Giuliani, the former New York City mayor and presidential candidate; Mary Jo White, the current nominee to chair the Securities and Exchange Commission and James Comey, a deputy US attorney general under President George W Bush.

While Giuliani was particularly aggressive in promoting his cases, Bharara also knows how to use the "power of the press conference," said Daniel Richman, a former federal prosecutor who worked under Giuliani and is now a law professor at Columbia University.

Bharara, 44, born in India and raised in New Jersey, has denied having higher ambitions, even as his name has been floated as a possible successor to US Attorney General Eric Holder.

As with his predecessors, Bharara receives much of the credit for work performed by a team of more than 220 prosecutors, who in turn rely on their own investigators and law enforcement officers from several US agencies.

His office won the conviction of hedge fund manager Raj Rajaratnam, the first insider trading probe to rely on FBI wiretaps. An ongoing probe has targeted managers at Steven A Cohen's SAC Capital Advisors, one of the world's biggest hedge funds, although Cohen has not been accused of wrongdoing.

Some staffers inside his office and at the FBI have grumbled privately that he received too much praise for some insider trading cases that stemmed from investigations predating his tenure.

Critics also say Bharara's insider trading success has obscured his reluctance to hold bank executives accountable for their actions during the financial crisis five years ago. He has responded, in part, by saying such cases can take years to build.

Last October, Bharara filed a lawsuit against Bank of America, accusing it of costing taxpayers more than $1 billion by selling toxic mortgage loans to Fannie Mae and Freddie Mac, the quasi-governmental bodies that guarantee mortgages. It was the first justice department civil fraud case over loans sold to the two mortgage giants.

The office has also overseen the conviction of Faisal Shahzad, who admitted to attempting to detonate a bomb in Times Square, and al Qaeda operative Ahmed Ghailani, who helped bomb the US embassies in Kenya and Tanzania.

Tuesday's charges came in the midst of New York's first open mayoral race since 2001. Mayor Michael Bloomberg leaves office at the year's end after three terms, providing Bharara with a potential forum to advertise for his next job.

"It's a natural question about somebody who's been as successful in such a high-profile position," said attorney Randy Mastro, a friend who worked with Bharara at the law firm Gibson Dunn & Crutcher years ago.

Previous corruption arrests include former city councilman Hiram Monserrate, charged with misusing funds and former state senator Carl Kruger, convicted of taking bribes. Assemblyman William Boyland was acquitted of bribery, but later charged in Brooklyn in a separate bribery case.

Before becoming US attorney, Bharara was counsel to New York Democratic senator Charles Schumer and helped lead the Senate Judiciary Committee's investigation into the 2006 firing of several US attorneys around the country. He graduated from Harvard University and Columbia Law School and worked as an assistant US attorney in Manhattan from 2000 to 2005, prosecuting Mafia and securities fraud cases.

Bharara, married with three children, is an avid Bruce Springsteen fan.

He signaled early on that he recognised a good sound bite, riffing on the Hollywood movie Wall Street character Gordon Gekko while announcing the indictment of Rajaratnam.

"Greed," he said, "sometimes, is not good."


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