IN A SPEECH in October, Preet Bharara, federal prosecutor for the Southern District of New York, laid out his plans to root out insider trading, which he compared to a “performance-enhancing drug”. Some of the hedge-fund industry’s top brass may soon stand accused of using what Mr Bharara called “financial steroids”. On November 22nd the Federal Bureau of Investigation (FBI) raided three hedge funds as part of a sweeping investigation into insider trading that could prove to be the largest that the industry has ever faced.

Several well-known hedge funds, mutual funds and consulting firms have already been ensnared and the list of firms from which the government is demanding information continues to grow. Some are related to SAC Capital Advisors, a big outfit run by Steven Cohen, one of the industry’s most famous managers. Two of the hedge funds that FBI officials visited, Diamondback Capital Management and Level Global Investors, are headed by former SAC traders, one of whom is also Mr Cohen’s brother-in-law. SAC itself has received a subpoena from the federal government, which has made a request for broad swathes of information.

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Joseph Grundfest, a professor at Stanford University and former SEC commissioner, thinks that through this investigation the SEC may be trying to “expand traditional conceptions” of what constitutes insider trading. But it is still unclear what information was actually peddled. For the time being, nervous firms will have to wait for more subpoenas to be issued and more charges to be brought.