New York: Raj Rajaratnam, the billionaire Founder of Galleon Group, along with five former directors (two are Indian born) at a Bear Stearns company's hedge fund was among the six people charged in a $20 million insider trading scheme that federal prosecutors called the biggest case involving hedge funds.

According to Bloomberg, prosecutors also arrested Rajiv Goel, who worked at Intel Capital as a Director in strategic investments, Anil Kumar, who worked as a Director at McKinsey, and IBM Executive, Robert Moffat. The former officials at Bear Stearns asset management are Danielle Chiesi and Mark Kurland, who were affiliated with the firm's New Castle Partners, which managed about $1 billion.

"The defendants operated in a world of, you scratch my back, I'll scratch your back," U.S. Attorney Preet Bharara in Manhattan said at a press conference today. "Greed, sometimes, is not good." The case is the largest ever over hedge fund insider - trading, Bharara said. It's the first time wiretaps have been used to target insider trading, signaling the government will now use the same tools against Wall Street that it employs in organized crime and drug cases, he said. Bharara called the case "unprecedented."

Rajaratnam's Galleon Group is one of the world's largest hedge funds, with branches in London, Singapore, Mumbai and Menlo Park, California. The 52 year old investor was identified this year by Forbes as the 559th richest person in the world, with a net worth of $1.3 billion. U.S. Attorney, Preet Bharara said that investigators used wiretaps for the first time ever in probing insider trading. Wiretaps are normally reserved for organised crime and drug cases.

U.S. Magistrate Judge, Douglas Eaton set Rajaratnam's bail at $100 million, to be secured by $20 million in assets and guaranteed by his wife and four others. Rajaratnam cannot travel more than 110 miles from New York City, but he won't be subject to electronic monitoring.

Assistant U.S. Attorney Josh Klein asked Eaton to hold Rajaratnam in jail pending his trial. He said that the hedge fund manager had 'enormous incentive' to flee to his native Sri Lanka or elsewhere. The prosecutor also said that there is additional evidence, and there may be more charges against him.

Rajaratnam told court officials after his arrest that he was worth $200 million.

Defense attorney Jim Walden said in court that prosecutors are misconstruing the evidence against Rajaratnam and that the case isn't as strong as prosecutors allege. He said Rajaratnam is a diabetic and supports his parents and won't flee, and he warned that Galleon, which he said managed $8 billion, may be forced to close if Rajaratnam were jailed.

Other defendants arrested in New York were freed after posting bonds between $2 million and $5 million. Goel was arrested in California. Alan Kaufman, the attorney for Chiesi, 43, said in an interview that his client was 'shocked' at her arrest this morning and will plead innocent. Kurland's attorney, Lawrence Iason, and Moffett's lawyer, Kerry Lawrence, also said their clients aren't guilty.

"Anil Kumar is as shocked as everyone else who knows him to see his name in this complaint," his lawyer, Charles Clayman, said in a statement. "He emphatically denies these charges."

According to prosecutors, tips to Rajaratnam came from insiders and others at hedge funds, investor relations firms, and companies including Intel, IBM, McKinsey, and companies whose shares were traded in the scheme. Bharara said the investigation was continuing and declined to say whether others would be charged.

Rajaratnam and his firm earned from $17 million to $18 million from the fraud, Bharara said. In recent days, he may have been aware he was under investigation. According to one of two criminal complaints filed today, he told an acquaintance that he believed a former Galleon employee was wearing a 'wire.' Rajaratnam bought a plane ticket on Oct. 14 for travel to London today, the complaint says.