Eugene Ingoglia: "Taking a conversation offline provides evidence of intent because if you're trying to cover your tracks, you probably know what you're doing is wrong," Photo / Chris Gorman
Eugene Ingoglia: "Taking a conversation offline provides evidence of intent because if you're trying to cover your tracks, you probably know what you're doing is wrong," Photo / Chris Gorman
Criminals always slip up. They leave behind fingerprints. Hair. A cigarette butt.
A telltale acronym.
TYOP (tell you on phone), TOL (talk offline) and LDL (let's discuss live) are red flags for prosecutors combing through the email transcripts of Wall Street traders suspected of illegal activity. No need for acrime lab.
A simple search -- Control-F on the computer keyboard -- has become one of investigators' favourite weapons to uncover possible lawbreaking, according to defense attorneys and current and former prosecutors who agreed to speak on condition of anonymity.
"Taking a conversation offline provides evidence of intent because if you're trying to cover your tracks, you probably know what you're doing is wrong," said Eugene Ingoglia, a partner at Morvillo and former assistant U.S. attorney for the Southern District of New York.
Phrases such as "call my cell" and "let's go off email" remain popular among the people who plot insider trades or the rigging of some of the world's biggest markets. New expressions and acronyms pop up all the time, and authorities say they build lists of favored terms.
Evasion techniques can get creative. Raj Rajaratnam, the fund manager convicted in 2011 of insider trading, would write "fon" instead of "phone." Prosecutors said they suspected the intentional misspelling was meant to distract the all-seeing electronic Javert of Control-F.
Investigators for the Securities and Exchange Commission and Justice Department get so many emails they can't possibly review them all without using Control-F, said Reed Brodsky, a partner at Gibson, Dunn & Crutcher who prosecuted Rajaratnam when he was with the U.S. Southern District.
"They use terms to find evidence of whether someone is trying to hide their activities because evidence of a cover-up is frequently more potent than the evidence of the alleged crime," Brodsky said.
Photo / Getty Images
Simply highlighting suggestive phrases isn't enough, of course. In many instances, traders have an honest need to talk about complicated deals in person or over the phone. And homing in on a suggestion to go off email is usually only the start. Authorities then have to go through hours of records in what one prosecutor called a thoroughly laborious process to gather evidence that a crime was committed.
Sometimes, though, just taking a conversation offline can be enough for a presumption of shady activity. In 2010, senators obtained internal emails from Goldman Sachs in which bankers used the term LDL for "let's discuss live" when sensitive topics arose.
The revelations came during a push to ban the practice of federally insured banks trading for their own accounts. They contributed to the inclusion of the Volcker Rule, which limits how banks wager their money, in the Dodd- Frank Act later that year.
