Have you been suspecting that your husband or wife may have involved him or herself in some insider trading? Are you worried that the Feds may know too? While there’s not much you can do short of getting out of town or finding a safe house and laying low, you can arm yourself with the knowledge of what’s in store and mentally prepare accordingly.

Today’s tips come from Arlene Drimal, wife of accused insider trader Craig Drimal. Craig, who segued from a job as a bouncer at The Roxy to a gig at Galleon several years back, pleaded guilty to securities fraud yesterday. The FBI used wiretaps to catch him in the act, and while they were there, couldn’t help but listen in on some “deeply personal and intimate discussion about [the Drimal's] marriage,” including “intimate aspects of the relationship.” So, that’s Number 1: Government officials will be listening when you discuss spicing things up with the furry dice.

Number 2: Rudeness and ‘tude:

The FBI officials told Mr. Drimal they “had recorded his conversations for a very long time, that they knew ‘everything’ about him and his family and friends and mentioned other personal factors leaving the distinct impression that our phones were currently tapped,” Ms. Drimal wrote. The agents asked him to cooperate in their investigation and threatened to arrest him if he didn’t, she wrote, adding that they said he could spend 25 years in prison. The couple “went up to our bedroom to discuss how to ensure privacy,” as they discussed how to find a lawyer, Ms. Drimal wrote. “Feeling trapped, I recommended that we go to CVS [a drugstore] in Westport to buy a prepaid phone,” Ms. Drimal wrote. “Immediately after I said that, FBI agent, David Makol, called and asked to speak to my husband. He warned him not to go out and get a prepaid phone,” she wrote. “That terrified us and we felt panicked.”

Number 3: Late night visits:

On Nov. 2, 2009, Mr. Drimal met with agents and prosecutors asking for his cooperation, she wrote, which he declined to give. Three days later, the couple—along with their 11-year-old son, who had crawled into their bed during the night—was awakened by the lights, bullhorn and pounding on the door, Ms. Drimal wrote. “I hurried down to the front door … on which they were impatiently banging as they hollered,” she wrote, holding back their German shepherd and Staffordshire terrier. “As soon as I opened the door, numerous agents filed into the house,” she wrote. “I noticed some of them touched their weapons, eyeing the Staffordshire in particular. I stood there crying silently, barely dressed and attempting to cover my chest with my arms and assured them the dogs were friendly,” she wrote.

Number 4: PTSD and paranoia:

Ms. Drimal wrote that she has been treated for post-traumatic stress disorder. She worries about her children, including a daughter who asked recently if her father’s legal troubles would affect her ability to get into law school or gain employment. “Just looking out my window in the morning when I wake up,” she wrote, “reminds me of that arrest and violations of my privacy every day.”

When The Feds Are Watching [WSJ]

Earlier: Federal Agents Couldn’t Help But Listen In On Weight Lifter Turned Accused Insider Trader Craig Drimal’s “Deeply Personal” Conversation With His Wife

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Keeping watch over the 20 or so journalists reporting on Rajaratnam’s trial is Jim McCarthy, who handles the defendant’s media relations. McCarthy, the founder of New York-based CounterPoint Strategies LLC, isn’t shy about his views of the coverage. “Some of the coverage has been” — he paused for five seconds as he considered his words — “distorted and irresponsible,” McCarthy said in an interview yesterday. He’s particularly critical of some reporters and news organizations who he claims “have been slanting their coverage” in hopes of “gaining favor with the government,” he said. [Bloomberg]

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It’s possible, as this damn insider trading trial has left him with little time to focus on his team.

Leading the jury’s discussions is a 56-year-old man who has worked for two years as a graphic artist for Apple. A native of Manhattan’s Lower East Side, the juror, who was selected as foreman yesterday, has lived in the Bronx for about a decade. He’s one of three men on the 12-person jury. During jury selection seven weeks ago, he told the judge that he is married to a school teacher, reads Macworld and Sports Illustrated, and enjoys watching ESPN and “Man v. Food” and playing video games. “The basic guy stuff,” he said. He’s also a fan of the New York Knicks, who were swept this week by the Boston Celtics in National Basketball Association post-season play..

[Bloomberg]

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Bloomberg Brief recently caught up with Nixon speechwriter, actor and Clear Eyes shill Ben Stein to pick his brain on the state of the hedge fund industry. Stein’s thoughts? Investors are getting robbed on management/performance fees and the only way a hedge fund can beat the market is via insider trading which Stein wants no part of in case anyone was wondering.

“This has been an absolutely monumental recent period for event-driven arbitrage, so that’s what I love,” Ben Stein said in an interview. He dislikes currency hedge funds because the strategy is “too treacherous.” “I don’t have any confidence that the people I’d be working with can outperform any kind of index of it,” he said…Retail investors should invest in exchange-traded funds or mutual funds that replicate hedge fund returns, Stein said, because they charge lower fees and have better returns.

“These simulacra of hedge funds are going to completely change that world,” he said. “that is the wave of the future. If you’re getting the same results as you get if you’re paying 2 and 20, why not go with the $5,000 minimum investment and the fee of $100?” The federal government’s insider trading investigation is also another reason to avoid investing in traditional hedge funds, he said. “Financial theory tells you that you cannot beat the large indexes unless you are getting inside information, and I don’t want to be part of anything that involves inside information.”

Related: Ben Stein: Merrill Lynch Is An Astonishingly Well-Run Company

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As previously mentioned, the jury on the Raj Rajaratnam insider trading trial are expected to begin deliberating today. While the Galleon founder is, of course, innocent until prove guilty, much of the evidence brought by the prosecution has made him look not so good, including but not limited to recordings of Raj complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” as well as testimony from former McKinsey exec, Anil Kumar, that Raj paid him $1 million for his tip about AMD’s acquisition of ATI and the previously undisclosed fact that the defense’s big witness, Richard Schutte, was gifted with a $15 million investment in his hedge fund by the Rajaratnam family two weeks prior to speaking glowingly of Raj.

Having said that, Raj’s lead attorney, John Dowd, knows the men and women of the jury will be ‘fair’ (i.e. find his client not guilty), because 1. Every witness brought by the prosecution is a liar, especially that Anil Kumar guy and 2. He wouldn’t have picked them if they weren’t so awesome.

The Crucial Question For The Rajaratnam Jury [Dealbook]

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Earlier this morning, Raj Rajaratnam’s 7-man legal team led by attorney John Down gave its final remarks in the insider trading case. While the Galleon founder is, of course, innocent until prove guilty, much of the evidence brought by the prosecution has made him look prettay prettay prettay bad, including but not limited to recordings of Raj complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” as well as testimony from a former McKinsey exec that Raj paid him $1 million for his tip about AMD’s acquisition of ATI and the previously undisclosed fact that the defense’s big witness, Richard Schutte, was gifted with a $15 million investment in his hedge fund by the Rajaratnam family two weeks prior to speaking glowingly of Raj. How did Dowd explain all that in his wrap-up? It’s pretty simple, really. Everyone who said something that suggested his client was guilty is a liar.

Dowd said former McKinsey & Co. consultant Anil Kumar “was a tax cheat and he admitted he was a tax cheat.” “You know you can’t trust Anil Kumar…This case is just make-believe,” Mr. Dowd said.

Mr. Dowd, after discussing Mr. Kumar, turned to Adam Smith, a former Galleon Group portfolio manager who has also pleaded guilty in connection with tips he allegedly provided Mr. Rajaratnam. Mr. Smith testified at the trial that he gave his boss nonpublic information he received from a Morgan Stanley investment banker, and also told jurors that Mr. Rajaratnam made efforts to hide insider trading. The defense later called witnesses who testified that Mr. Smith had denied insider trading to Mr. Rajaratnam’s lawyers last year and said the government had pressured him to plead guilty to providing confidential information he hadn’t given. “Smith has changed his story so many times he doesn’t know if he’s coming or going,” Mr. Dowd said. “You can’t trust Smith any more than you can trust Kumar. You know that Smith and Kumar are lying because the evidence proves they’re lying.”

Dowd did not say whether or not the wiretaps lied, but it would follow.

[WSJ]

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The Galleon founder demonstrated “in his own words” why he’s guilty of insider trading, Assistant US Attorney Reed Brodsky said in the government’s closing statement this morning.

Brodsky, of course, was referring to the various wiretaps played over the last several weeks that included conversations wherein Rajaratnam complimented Danielle Chiesi on how she “played” a tech exec into giving her material non-public information, told a friend he knew to buy shares of a company because “one of our guys is on the board,” and complained about a well-paid tipster slacking off on giving him the good stuff. In related news, don’t forget to vote in the Will He Or Won’t He (Go To Jail) poll, where so far 15% of people think Raj will get off.

[WSJ]

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Earlier today, Raj Rajaratnam’s 7-man legal team rested its defense of the Galleon founder, accused of insider trading. This unfortunately means that the man of the hour will not take the stand, as some had hoped, but there may be a few more surprises in store.

According to assistant U.S. Attorney Jonathan Streeter, the prosecution will be playing two more wiretap recordings of Rajaratnam. So far we’ve heard conversations in which Raj can be heard complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” in addition to being told told that his brother felt the need to destroy his “private notebooks” and that he paid former McKinsey exec Anil Kumar $1 million for his tip about AMD’s acquisition of ATI. Additionally, last week it was disclosed (by the prosecution), that the defense’s “star” witness, Richard Schutte, got a $15 million investment in his hedge fund by the Rajaratnam family two weeks before he took the stand to tell the jury Raj was “amazingly well-educated on the issues” and never asked for material, non-public information in Schutte’s presence. Despite all that looking kind of bad for Raj-Raj, a business school professor said on Friday that, in his opinion, it’s *possible* the accused manager made the trades in question without inside info. So this thing could really go either way.

Rajaratnam Defense Rests [Bloomberg]

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$$$ Fed Reports Economic Improvement [WSJ]

$$$ Byron Wien: End of Fed Easing Will Create Summer ‘Swoon‘ [CNBC]

$$$ Cash-Strapped NFL Players Seeking High-Risk “Lockout Loans” [TPG]

$$$ Rajaratnam, Goldman’s Cohn Lunched in 2008, Galleon Witness Says [BW]

$$$ The FBI has dubbed its undercover insider trading probes that led to Skowron and other defendants the “Perfect Hedge.” [Reuters]

$$$ Banks Must Pay Victims of Botched Foreclosures, Regulators Say [Bloomberg]

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If you’ve been keeping up with the Raj Rajaratnam insider trading trial, you may have come to the conclusion that things have not been going so hot for the Galleon founder. Though he is of course innocent until proven guilty, so far jurors have heard that Raj’s brother felt the need to destroy his big brother’s “private notebooks,” tapes of Raj telling Danielle Chiesi to keep their dealings on the down low, tapes of Raj telling a friend he knew to buy shares of a company because “one of our guys is on the board,” and testimony from former McKinsey exec that Raj paid him $1 million for his tip about AMD’s acquisition of ATI. Sure, Raj’s former head of research testified he never heard the boss asking for inside information and that the big man was “the most prepared of” any of the Galleon team simply by virtue of being “amazingly educated on the issues at hand” but the odds of getting off? Not so great. That’s why he needs a Hail Mary- one in which he’ll dazzle ‘em with fashion.

Once Rajaratnam’s case is in the jurors’ hands, though, anything could happen. “I once had a case as a prosecutor, and talked with a juror who said the biggest thing was how the female defendant wore a different matching pair of shoes and a purse every day,” Wisenberg recalled. “It had nothing to do with the case.” He said he won.

Just something to think about.

Will New US Insider Case Taint Rajaratnam Jury? [Reuters]

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