DOJ centralizes control of sensitive Senate insider-trading probes

Multiple U.S. Attorney’s offices — including the Southern District of New York — wanted to handle insider trading investigations of lawmakers, one of the sources said, but all the probes have been centralized in D.C. It would have been logical for SDNY to have jurisdiction: Wall Street is located there, and the district has extensive experience investigating and prosecuting complex financial cases. Other offices that telegraphed interest were the residences of potential targets. Spokespersons for the Justice Department and SDNY declined to comment…

The Public Integrity Section, meanwhile, could face its highest-profile prosecution in years if the DOJ charges any lawmakers under the STOCK Act. That section, which is part of the Criminal Division of Main Justice, has faced a string of prominent and bruising defeats over the past decade.

The long shadow of its calamitous 2008 prosecution of Sen. Ted Stevens — when prosecutors withheld exculpatory information from the senator’s lawyers, leading to the Justice Department moving to dismiss the indictment in 2009 — still hangs over the unit. Since then, its lawyers have faced more defeats: an 8-0 Supreme Court ruling overturning the conviction of Republican Virginia Gov. Bob McDonnell, a deadlocked jury in the case against former Sen. John Edwards (D-N.C.), and a loss at trial in the case against Sen. Robert Menendez (D-N.J.).