A federal judge in Manhattan, P. Kevin Castel, has given the U.S. attorney for the Southern District of New York, Preet Bharara, a two-week deadline to provide a written update on "the status of all investigations and proceedings against" a supervisory special agent of the FBI, David Chaves, "or any other person making or concealing unauthorized disclosures related to insider trading investigations."
The judge ordered additional reports to continue after the end of each calendar quarter.
Judge Castel's order, dated March 1, stopped short of the dismissal or evidentiary hearing that lawyers for the defendant in the case, William Walters, had requested.
Yet in some ways, it went even further, suggesting that leaks to the press in other insider trading investigations "and the role of Chaves and possibly other special agents in leaks ought to be the subject of the pending criminal investigation."
Judge Castel wrote in the memorandum and order: "The conduct on the part of at least one special agent of the FBI in leaking grand jury material is worthy of the full measure of the Department of Justice's investigative and, if appropriate, prosecutorial resources. The Court trusts that these resources will be devoted to this matter."
A dismissal wasn't warranted because Mr. Walters couldn't demonstrate he'd been damaged by the leaks, the judge found.
The 20-page memorandum and opinion names Susan Pulliam and Michael Rothfeld of the Wall Street Journal and Matthew Goldstein and Ben Protess of the New York Times as the recipients of the leaks.
Judge Castel was nominated to the federal bench by President George W. Bush.
The case has been closely watched here because of the potential that the string of insider trading prosecutions — many of which were already overturned by an appellate court — would be further undercut by the disclosure of FBI misconduct. Grand jury material is kept secret in part out of fear that publicity could prevent a fair trial, taint innocent people, or undermine an ongoing investigation.