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March is Women's History Month!

Why Don't More People Care About Insider Trading?

DAVID GREENE, HOST:

We have been reporting on what's being described as one of the largest insider trading cases in U.S. history. Federal prosecutors say the culture at hedge fund SAC Capital Advisors encouraged insider trading. The Connecticut-based firm was founded by the flashy but embattled billionaire Steven Cohen. Billionaires and their billions. Charges of insider trading, Wall Street intrigue - it's enough to remind you of a certain movie character.

(SOUNDBITE OF MOVIE, "WALL STREET")

GREENE: That's Michael Douglas playing Gordon Gekko in the 1987 movie "Wall Street." The character was inspired, some say, by the trader Ivan Boesky, who became famous during the insider trading scandals of the 1980s.

Now, the current charges against SAC are part of a crackdown on insider trading that involves even more money - and even more people. But today's scandals don't seem to stick in popular culture in the same way. Financial journalist Bryan Burrough covered the scandals of the '80s and he's been covering the SAC investigation for the magazine Vanity Fair. He sees far fewer people paying attention today.

BRYAN BURROUGH: No. I really daresay this story has yet to jump the curbs of the business press. I've actually tested it out; when I go home to Texas or out in Midwest, I'll say so, how do you feel about this SAC thing or Steve Cohen? And I just get blank stares by and large.

(LAUGHTER)

BURROUGH: This so far has not connected with the zeitgeist.

GREENE: Remind us what is insider trading and who gets hurt when it happens?

BURROUGH: Well, you're supposed to trade without inside knowledge of a company's upcoming earnings or business decisions. You are supposed to trade essentially, as anybody, anybody else would. And if you get inside information from a CEO or a company executive, you're not supposed to trade on that. The allegations against Mr. Cohen's firm, SAC, is that in fact, for something like 12, 13 years they have been a veritable factory for doing that. And, you know, it is the biggest insider case, clearly, that we've seen since the days of the '80s.

GREENE: I do want to be clear, this is an indictment, not a verdict. No conviction at SAC. But when it comes to just - I mean, even the sheer amount of money involved, the number of people, how does this case compare to the big scandals of the '80s?

BURROUGH: Well, already it's bigger in terms of numbers, something, you know, 80 people have already pled guilty. Certainly, just the dollars, the billions are bigger in many cases because there's so much more money on Wall Street today. But the sex of it is noticeably less. Back in the '80s we had, you know, flashy guys like Ivan Boesky literally giving, you know, bags of cash to investment bankers with suspenders. This involves a hedge fund in an industry that is largely opaque to outsiders. It involves people you and most people have never heard of, doing things that they know very little about. It's also, in the '80s, the information was about big takeovers. Here it's so much more mundane and systemic. The allegation being that so-and-so had a beer and learned about General Electric's fourth-quarter earnings two days early. You know, just not the type of things that Oliver Stone is likely to make a movie about.

(LAUGHTER)

GREENE: It's not made for Hollywood exactly. Well, so if you're going home to Texas and, you know, bringing up SAC and hardly anyone knows what it is, is aware of it, why is the wider public outside Wall Street not caring as much about this, you know, today? Is our culture different?

BURROUGH: No. I believe it's because of the financial crisis of '08, '09. At this point, it feels like prosecuting insider traders, it's like prosecuting squeegee men at a time that a mass murder has been carried out on 43rd Street. It just doesn't seem like the crime that some of these other things felt like: the mortgage crisis, the collapse of Bear Stearns, Lehman Brothers. All these things happened and instead what we're brought is a breakfast consisting of, you know, a prosecution of a guy in Stamford, Connecticut that we've never heard of that did things that didn't affect our lives. And I think that's the reason that people are less than excited about this.

GREENE: Bryan Burrough is a special correspondent of Vanity Fair magazine and also co-author of "Barbarians at the Gate," a book about the buyout of RJR Nabisco and Wall Street culture in the 1980s.

Bryan, thanks a lot.

BURROUGH: Awesome, David. Thank you very much. Transcript provided by NPR, Copyright NPR.