November 27, 2012
Social media is a useful tool to investigate potential cases of securities fraud, two “top” FBI agents told Reuters.
April Brooks, a special agent in charge of the FBI New York field office and David Chaves, a supervisory agent, told Reuters the agency views social networking sites such as Facebook and Twitter as hotbeds for securities fraud.
Brooks and Chaves, supervisors of ‘Operation Perfect Hedge,’ a long-running probe into insider trading, said FBI agents habitually search Twitter and Facebook for leads when investigating fraud.
The pair identified social media trends and technological advances as a breeding ground for the next generation of securities fraud.
“I will tell you technology will play a huge part, social media, Twitter. Any kind of technology that is new and doesn’t exist today, if there is any way to exploit it, these individuals will exploit it,” Brooks told Reuters TV.
Critics have condemned U.S. law enforcement officials, saying the focus on insider trading is a bid to divert attention from the fact they have been unable to prosecute Wall Street bankers over the financial crisis.
“I wouldn’t say we have missed opportunities,” Brooks told Reuters, referring to the 2008 financial crisis. “There may be others who are responsible, but who don’t necessarily violate the federal statutes.”
The two agents said they have told people on Wall Street there is no push to nail the hedge fund industry, rather, the insider trading investigation is an attempt to keep the markets fair for everyone.
“The message is we are out there, and we are going to continue to be out there,” Brooks said. “This type of violation, this type of crime, impacts everyone.”