We now have the first arrest as a result of the Department of Justice’s investigation of insider trading facilitated by “research firms”:

The government made the first arrest in a broad investigation of alleged insider trading on Wall Street, charging an employee of a California research firm used by hedge funds.

Don Ching Trang Chu was arrested at his home in Somerset, N.J., and charged in federal court in New York with two counts of conspiracy to commit fraud. He was released on a $1-million bond.

A complaint filed by prosecutors says Chu helped hedge funds get inside information on publicly traded companies by connecting the funds with employees of the firms. 

One interesting thing to note is that, like Tamil financier Raj Rajaratnam of Galleon, once again they have arrested someone who isn’t a member of the Wall Street white boy’s club.

The real question here is whether this will be pursued up the chain.

My guess is no, because both Obama and Eric “Place” Holder have sold their genitals to the finance industry have decided to look forward, and not backward.

In a related note, a judge has said that the wiretaps in the Galleon case are admissible, which implies that this will increasingly be used as a tool by prosecutors in financial corruption.