Bharara is rumoured to have secretly questioned former employees of the target, none of whom are under investigation nor under threat of being charged, but nonetheless were believed to have given the US Attorney important insights into how it worked. After the revelations, the mood of his legal team was reported to be decidely sombre.
Here is what he has learned: Analysts, portfolio managers, brokers with juicy tips, have long been under strict instructions never to reveal material non-public information to the big fish since as everyone knows, that's illegal under current laws and their interpretation by the higher courts. But that doesn't mean the big fish doesn't want to know. Or trade accordingly should it become known. But, in order to not transgress the law, he needs to figure "it" out himself, whatever "it" is. To be free to act and trade in such situations, he needs to have the equivalent of an epiphany, or miraculous revelation, one that no court could prove, nor jury unanimously find, was the result of receiving inside information.
Enter the obscure and enigmatic Japanese art of Kōans and Haikus. The Kōan is an ancient form of teaching representing an allusive metaphor, conveyed by a perplexing story, parable, dialogue or series of impenetratable questions that confront the seeker with a riddle of sorts. The purpose is to provoke sudden awakening in the unenlightened or in western parlance, cause an epiphany, of precisely the type the big fish needs to insure no jury would ever be able to make the connection between something that superficially makes no sense, and that which requires years of rigorous zen-buddhist training to tease out.
To demonstrate, examine this Kōan:
Blind Man: Ha, ha, never assume because a man has no eyes he cannot see. Close your eyes. What do you hear?
Boy: I hear the water, I hear the birds.
Blind Man: Do you hear your own heartbeat?
Blind Man: Do you hear the grasshopper that is at your feet?
Boy: [looks down and sees the insect] Old man, how is it that you hear these things?
Blind Man: Young man, how is it that you do not?
The pupils of the Tendai school used to study meditation before Zen entered Japan. Four of them who were intimate friends promised one another to observe seven days of silence.
On the first day all were silent. Their meditation had begun auspiciously, but when night came and the oil lamps were growing dim one of the pupils could not help exclaiming to a servant: "Fix those lamps."
The second pupil was surprised to hear the first one talk. "We are not supposed to say a word," he remarked.
"You two are stupid. Why did you talk?" asked the third.
"I am the only one who has not talked," concluded the fourth pupil.
To the ordinary person, this just reminds them of Master Po of Kung-Fu, who was the Blind Guy with the white eyes and Fu-Manchu talking riddles to the flash-backed young David Carradine. To the trained Master, however, he KNOWS this has a deeper more important meaning. The first one, properly interpretated should be read as "ZOLL 2-be bot by Japs - Back up the Truck". The second is bit more complicated but can be deciphered as: "CSCO's quarter will be light by a dime - Drop 4 million shares!" Less wise interpretors might just understand it as "CSCO - Get outta' Dodge now". Yet, when a Federal investigator goes through email communications with a fine-tooth comb, he will not be able to see anything unusual in the enigmatic riddle or the 900 year-old humorous parable - certainly not its embedded meaning.
Haikus are stylized verse, of seventeen syllables typically in 5-7-5 pattern across three respective lines, juxtaposing imagery of two seemingly unrelated ideas, to the unitiated even random ideas, obscured within a hidden thread or connection. The big fish, unknown to even close friends, is a Master in these arts, rapidly and accurately able to decrypt the seeming artistic riddle and extract the hidden meaning which would result in an actionable trade, with no discernible connection between the original material non-public information and the subsequent trade.
For example, take the following haiku:
old pond . . .
a frog leaps in
To the trained Master, of which it must be pointed out there are incredibly few, so few that prosecutors will find it difficult to find an expert to explain it to a jury, let alone convince the jury this is like a secret code with embedded messages, this can only mean "Trials Going Well! - Buy ELAN large"
To the layman, it would like two grown men innocently sharing an appreciation for poetry. What could be wrong with that? It seems absolutely preposterous to even suggest that there is a secret message inside, let alone material non-public information about an Irish Pharmaceutical company that caused an epiphany which was transformed into a $750 million dollar long position quicker than you can say "Captain Jack Sparrow". You can see the reason for Mr Bharara's sombre mood.
Even more cryptic is the next example:
the first cold shower
even the monkey seems to want
a little coat of straw
The uninitiated, looks at this looks and see the gibberish of some art-school type trying to impress his EMO girlfriend. However, to the highly trained Master this screams out: "ELNs new Drug Sucks!!!! Sell ALL - Borrow against the Entire Kingdom and Short a billion more!!". THAT is how powerful these Haiku's can be in calling up the powerful embedded imagery necessary to translate the inner message into a bold epiphany and action.
For Mr Bharara, regretfully, no one will believe it. It is too far-fetched. Too perfect. Too beautiful. THAT is why the Big Fish is a Master and .. ummm ... errr...the Big Fish, and Mr Bharara ...well...works for government.
(NB: Haikus courtesy of Bashō, via wikipedia, and yes, I know Master Po and Kung-Fu were Chinese/Shaolin creations but they were convenient for illustrative purposes and in any event most important ideas had their origins on the mainland anyway... )