For ‘Sheriff of Wall Street,’ this could be the case of his career

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Posted: Sunday, July 28, 2013 12:00 am

In recent years, Preet Bharara has prosecuted members of the powerful Latin Kings gang in Newburgh, N.Y., exposed corrupt state politicians and convicted terrorists.

But what has put Bharara, the U.S. attorney for the Southern District of New York, on the map and made him a media darling has been his relentless, laserlike focus on insider trading on Wall Street, which has thus far yielded 73 guilty pleas or convictions.

On Thursday, however, Bharara brought what some legal and political experts say could be the case of his career — criminal charges against SAC Capital Advisors, the hedge fund run by the billionaire Steven A. Cohen.

The culmination of an investigation that spanned nearly a decade, the case is a rare and bold step by the government. Simply by bringing criminal charges against the firm, the government may be effectively shutting down SAC by scaring off investors.

Even if Bharara loses the case, it could raise the specter of Arthur Andersen, the accounting firm that collapsed and cost 28,000 people their jobs after it was indicted in 2002 and convicted of obstruction of justice in connection with its failed audits of the energy company Enron.

A few years later, the U.S. Supreme Court overturned the conviction. Still, some legal experts said the cases were not really parallel.

“As firms go, this is an important one, but it’s no Arthur Andersen,” said Daniel C. Richman, a professor at Columbia Law School and a former assistant U.S. attorney in the Southern District.

If there was risk, it may have been in not bringing a case, Richman said. “With the drumbeat of queries as to where this case was going, anybody who was watching this would have wondered what had happened if there had been no pursuit of the entity or people,” Richman said.

A victory in the case, however, could propel Bharara onto a bigger platform.

While Bharara’s march on Wall Street has not quite turned him into a household name, it has landed him television interviews with the likes of Charlie Rose and an appearance on the cover of Time magazine. And it won him attention from one of his musical idols, Bruce Springsteen.

In November, Bharara traveled with his family to Hartford, Conn., for a Springsteen show. During the concert, Springsteen gave Bharara a shout-out before playing “Death to My Hometown,” which includes the line, “Send the robber barons straight to hell.”

Already, many political analysts are drawing comparisons between Bharara and another former U.S. attorney who rode convictions against Wall Street into the New York Mayor’s Office, Rudy Giuliani.

“This case is a total profile-raiser,” said Douglas Muzzio, a professor of public affairs at Baruch College in New York. “He has an almost ideal prosecutorial resume for political life afterward through prosecuting both public and private corruption.”

Bharara, who declined through a spokeswoman to be interviewed, has denied interest in running for office. But there has been talk that he is on the short list of possible replacements if Attorney General Eric Holder leaves.

A charismatic and quick-witted man who sprinkles self-deprecating jokes and movie references into interviews and speeches, Bharara arrived at the U.S. attorney’s office in August 2009. Almost immediately, he began focusing on a “creeping culture of corruption” across politics, Wall Street and in business, he told Time magazine in an interview in early 2012.

At a conference in Las Vegas in June, Bharara told a group of fraud examiners that they were doing “God’s work.” He followed that up by quoting a line from the 1994 film “Pulp Fiction” (originally from the Bible): “The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men.”

In 2000, after a few years in private practice, Bharara joined the prosecutor’s office in the Southern District, then headed by Mary Jo White. (White is now the chairwoman of the Securities and Exchange Commission, which just a few days ago filed a civil case against Cohen, accusing him of failing to supervise employees suspected of insider trading. Cohen was not charged in the criminal indictment announced on Thursday against SAC and has denied wrongdoing.)

In 2005, Bharara became chief counsel for Sen. Charles Schumer, D-N.Y. He later played a major role in the Senate Judiciary Committee’s investigation into the firings of U.S. attorneys around the country.

As the new “Sheriff of Wall Street,” Bharara has overseen the insider trading convictions of Raj Rajaratnam, the co-founder of the Galleon Group hedge fund, and Rajat Gupta, a former board member at Goldman Sachs.

But in bringing the charges on Thursday against SAC Capital, Bharara has taken an aggressive new stance by pursuing not an individual but an entire firm.

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