But even New York's favorite sheriffs have their problems. "In a word, grandstanding," the Post said after the raids, next to a picture of an open-mouthed Mr. Bharara. A few days later, the same word captioned another Post photograph of the man, for an article that said "insider trading is largely a victimless crime."

"There's a problem if you're trying to victimize an entire industry," Rudolph W. Giuliani, the Southern District's chief for most of the '80s, told The Observer last Thursday. "And it's very easy to jump to that conclusion, that he's victimizing that industry, and if you're inside that industry, you probably feel that way."

"Preet Sweep!" was The Journal's headline that Thursday, when consultants for one of the so-called expert networks, the groups that provide hedge funds with trading edges, were arrested. "We love--we're fans of business and of Wall Street," Boyd Johnson III, Mr. Bharara's deputy, said in an interview at their headquarters recently. "But we're called to enforce a series of laws that apply across the entire economy, and across various areas of America. And that's our job."

But Mr. Bharara is in a strange place. On the one hand, he's accused of rampaging against a triviality: "It's not even clear why it should be banned at all," CNBC has said about insider trading. "I wouldn't describe it as victimless; I would describe it as one of the genuinely confusing crimes," Mr. Giuliani said. "I think there should be some guidelines in prosecuting it; I tried hard to decline prosecuting if it was one-time-only."

On the other hand, the Southern District has been criticized for leaving alone the fundamental fraud and negligence that nearly ruined the global economy. "What remains to be seen is whether the cases the Southern District brings relating to Wall Street go to the structural problems of the Street, or whether they are merely individual examples of malfeasance," former governor and attorney general Eliot Spitzer explained on a recent evening, on his way to teach.

"I applaud the activism that seems to be focused on the important issues," he continued. "Only time will tell whether the individual cases are of a magnitude that will be transformative."

"I JUST REALLY think that the notion that he and I are not in favor of business?" Mr. Johnson, Mr. Bharara's deputy, said, incredulous. He had been the Southern District's public corruption chief, leading the investigation into the prostitution ring that ensnared Mr. Spitzer, before Mr. Bharara deputized him last year.

It was a bright day in downtown New York, and the afternoon sun was swarming the deputy U.S. attorney's office at the top of One St. Andrews Plaza. The light looked staged: Sun was actually dappling the yellow trimming of his American flag. "'Dapple' is a strong word," said Mr. Johnson. He keeps a baseball bat in his office. "Oh," he said, "I got that from some agents I worked with from the D.E.A." It's by the coat rack, which holds a fedora; he wears it occasionally. "It depends. I haven't for a while."

The office's new communications chief, Ellen Davis, would not make Mr. Bharara available for an interview, but she allowed a reporter to speak with two colleagues, in her presence. Whereas Mr. Bharara is known for an easygoing sense of humor, Mr. Johnson looks like a Dashiell Hammett investigator, only with a newscaster's jaw. "People who disagree with us about what the laws ought to be, and what the rules ought to be, those are important discussions to have, but we're not in that business," he said. "We pursue aggressively."

If the office was really against Wall Street, he said, it would not have pursued Sergey Aleynikov, who was just found guilty of thieving powerful, high-frequency computer code secrets from Goldman Sachs. "'Against business!'" said Mr. Johnson.

Like his colleagues, he does not comment on any specific cases. "And not to get into the details of any existing investigation, but any area, or within an organization, there are occasionally going to be bad apples, but that doesn't mean the whole tree is rotten," he said. "I mean, America was built by Wall Street."

He and Mr. Bharara worked at Gibson Dunn together in the '90s, and applied to the Southern District together. After half a decade there, Mr. Bharara left in 2005 to be Chuck Schumer's chief counsel and top aide on the Senate Judiciary Committee, where he led the investigation into the Bush administration's firing of U.S. attorneys. He returned last year, when he was named chief. "He doesn't think that highly of himself, and he makes that clear to people," Mr. Johnson said. "He's happy to be home, and he speaks about that almost every day."

Since his confirmation last August, Mr. Bharara has not been shy about going after Wall Street's rule breakers. "Today, tomorrow, next week, the week after," he said three months later, when charging the Galleon hedge fund billionaire Raj Rajaratnam and five others with a gargantuan insider-trading scheme, "privileged Wall Street insiders who are considering breaking the law will have to ask themselves one important question: Is law enforcement listening?"

HE WAS SPEAKING literally. "Some have asked, 'Why use court-authorized wiretaps in insider-trading cases?'" he told defense attorneys at a speech this October to the New York City Bar Association. "It does not take a rocket scientist to understand that it would be helpful to have the actual recording of the communication." He has a good ear for adjectives: He called insider trading unfair, unlawful, rampant and offensive. "We will use every aggressive and innovative method available," he said.

"It's as much about telling the world, 'We're doing something,' as making the individual case," said the bar's president, Samuel W. Seymour, who worked for the Southern District from 1988 to 1991, and is now a partner at Sullivan and Cromwell, the white-shoe firm that's long worked with Goldman Sachs. "It's making people stop and think. That's clearly his real goal. That's why he made the speech, right?"

Like his colleagues, Rich Zabel, the criminal division chief in Mr. Bharara's office, said that the Southern District's only target is wrongdoing. "No one's 'going after' Wall Street," he said.

Nevertheless, the hedge fund world tends to consider it annoyingly overzealous to say their misdeeds are rampant. "If cases are brought that are inappropriate, then that would be a fair criticism," said David Anders, who left the Southern District at the end of 2005 and is now a white-collar defense attorney at Wachtell, Lipton, Rosen & Katz.

His Southern District colleagues would point out that there have been 14 guilty pleas so far in the Galleon case, although that investigation began before Mr. Bharara rejoined the office. "Let's see," Mr. Anders said, "what the results are."

Despite the recent raids and arrests, no power players, let alone someone like Mr. Cohen, the multibillionaire, have been charged. But just before the raids, the news of a historic insider-trading attack was leaked to The Journal. "No one hates leaks more than Preet and myself," Mr. Johnson said. "Leaks are things that compromise our ongoing investigations; they jeopardize people's security. They're all bad for us. Not only do we resent the leaks, when appropriate we investigate and, when possible, prosecute."

Others aren't thrilled by them, either, and Southern District alumni like Debevoise & Plimpton's Mary Jo White, the chief of the office until early 2002, have overheard criticism. "Sometimes it's an inappropriate reaction," she said, "and sometimes it isn't."

"He's very aware of the power of this office," Mr. Johnson said, speaking slowly and with care. "And," he said, pausing, "he uses a tremendous amount of judgment," pausing again, "in exercising that power. He exercises a tremendous amount of restraint," pausing again, "in wielding that power, but he's prepared to do it, and to use it aggressively when appropriate."

THE BIGGER FISH are another problem. "Where Are the Financial Crisis Prosecutions?" said the headline of a recent Jesse Eisinger piece in ProPublica, which was run by The Times as "The Feds Stage a Sideshow, While the Big Tent Sits Empty." The Times itself lodged a similar complaint the day earlier. "We shouldn't be swayed by the winds out there that are looking for scalps in a particular area--or are looking for us to walk away from some other area," Mr. Johnson said.

"Inevitably, he will not satisfy those who are out for blood," said Viet Dinh, an assistant attorney general in George W. Bush's administration and a longtime friend of Mr. Bharara's.

"A lot of the stuff at the heart of the economic meltdown isn't necessarily criminal conduct," said Mr. Giuliani. If there was bad behavior in high finance, history will reflect that: "It is going to turn out to be, 'Boy, they turned out to do something stupid, wrong and irresponsible, but it's not a crime.'" Besides, he argued, Washington was more responsible than Wall Street for encouraging the real estate bubble. Hedge funds, he said, "didn't have much to do with any of this."

Either way, Mr. Bharara's office has other targets to worry about, too. Among other things, there have been hefty public corruption cases against giants like Hiram Monserrate, Vinnie Leibell and Bernie Kerik; indictments this year against Gambino crime family members and the drug kingpin Christopher Coke; huge Madoff settlements; and omnipresent terrorism investigations.

"This is the dream job for him," Mr. Johnson said. "His ambitions are not for Preet Bharara. His ambitions are for the Southern District of New York as a whole. And I think that's a powerful thing."

"He is restoring the Southern District," Mr. Spitzer said, "to a point of visual primacy in the prosecutorial world. And, for that, he is to be complimented."

mabelson@observer.com

Mr. Cooperman, according to Forbes, is worth $1.5 billion. "Exorbitant," he sighed, "exorbitant water bill."

Two days earlier, Mr. Cooperman and 16 others became the second group of philanthropists to sign the Giving Pledge, Bill Gates and Warren Buffett's effort to get the country's wealthiest people to publicly promise to give away the majority of their fortunes. "I know people who are just fucking hedonists, excuse the French," Mr. Cooperman, 67, said. "I'm not going to leave my kids destitute--I left them with a reasonable sum of money. And I'll give the rest away."

Meet the Newest Ultra-Rich Givers.>>

His thinking, he explained, was simple: He has worked hard, has no fancy habits, is contemplating what he's going to do with the rest of his life and feels a sort of Talmudic responsibility to share with the less fortunate. "I'm getting older," he said, "that's all."

But like anything involving elephantine sums of money, and because of recent Wall Street pledge-signers like the junk-bond pioneer Michael Milken and the corporate raider Carl Icahn, it isn't a simple story.

There are new signers with more recent scandals than Mr. Milken, who went to prison in the '90s for securities fraud. The subprime magnate T. Denny Sanford's Premier Bankcard, for example, was this autumn named America's worst credit card by Consumer Reports, which complained that its annual percentage rate fluctuates between 23.9 and 59.9 percent. The same month, Ted Forstmann, the head of the sports management behemoth IMG, was accused in a lawsuit of gambling millions on matches, sometimes involving his own clients. "Can you imagine that," he told one reporter, "I bet a few bucks on sports?"

Last month, even before the second batch of donors was announced, The Times' Giving section raised the issue that the pledge might be "totally a PR thing," to which the Home Depot co-founder and pledge-signer Bernard Marcus took offense. "All this money is going for charity to help people," he said then. "What kind of numbskull would find something wrong with that?"

THE OPENING LINE of Mr. Milken's Wikipedia entry says he's known for junk bonds and his guilty plea, and only the sentence's last four words mention his "funding of medical research." Will the pledge that he and his wife, Lori, signed be a step toward changing the financier's place in the public mind?

That question is offensive, said Geoffrey Moore, a longtime spokesperson and a senior adviser to Mr. Milken. In a 1,100-word correspondence with The Observer, he quoted commendations from Alan Dershowitz, Esquire magazine and a former Los Angeles Times columnist, and also the Most Likely to Succeed vote that Ms. Milken won in high school. The "implication that 40 years of philanthropy is some kind of PR ploy to change an image is offensive not just to Mike and Lori," he wrote, "but also to the hundreds of dedicated people who work with them--many of us for decades--on their charitable endeavors; and to the millions who have benefited from the impact of their philanthropic initiatives."

Mr. Moore said Mr. Milken is not defined by the high-yield bonds he pioneered at Drexel Burnham Lambert in the '80s, or the jail time that followed closely afterward. "I talk to people all over the world who wouldn't consider that the definition of who he is. Mike has met with public officials and delivered speeches in more than 35 countries in the past decade alone and he is very widely respected." He added that Mr. Milken was "flooded with similar requests" for interviews; his wife could not speak, either.

The emails from Mr. Moore, like the biography on Mr. Milken's Web site, say that he was listed as one of the most influential people of the century by Esquire two years ago. Quoting The New Yorker, that bio also says, "In the end, Milken was right." That line is from a 2001 James Surowiecki piece called "Drexel 2.0," which compared Mr. Milken's firm, "the sketchiest investment bank in America," to Enron. Drexel, the magazine said, embodied "the brash, corruptible corporate financier," and if many of its insights were correct, like the energy giant's, "both were spoiled by success and undone by hubris."

That image of corporate corruption, Mr. Moore said, was "created by certain writers during a brief period in his life." That was when "the press discovered him as the bête noire of Wall Street because of whispers from the PR departments of his competitors--old-line establishment Wall Street firms that were losing market share." The whisper campaign, he said, succeeded. "Mike didn't counter this campaign, assuming--naïvely, it turned out--that his business and philanthropic accomplishments would speak for themselves."

THE GIVING PLEDGE'S first 40 signers had their issues, too. Mr. Icahn follows two other iconic corporate raiders, Ron Perelman and T. Boone Pickens, just as Mr. Forstmann was preceded by the buyout billionaires David Rubenstein and Pete Peterson. And Premier Bankcard's Mr. Sanford signed on after Herb and Marion Sandler, who made about $2.3 billion when Wachovia bought their World Savings Bank, one of the housing bubble's most aggressive lenders. Another subprime icon, the former Citi CEO and chairman Sandy Weill, was in the first wave, too.

A different kind of mortgage legend, Jeff Greene, is in the second. Though he recently ran for a U.S. Senate seat in Florida, Mr. Greene is the California real estate magnate who managed to personally use credit default swaps to bet against the housing market, copying his friend John Paulson's strategy. "I tend to be pretty conservative in the way I spend money," he told The Journal in 2008, while describing the Peruvian-carved lions framing the fireplace in his 40,000-square-foot mansion, Palazzo di Amore. Its art includes a "dark metal rendering of a dollar bill."

In a letter to Mr. Buffett confirming his pledge, publicly available on the group's Web site, Mr. Greene wrote that he didn't participate in the first round because of his Florida campaign, which he lost, because "it would have looked like I was trying to exploit this for political gain."

Likewise, Ted Turner's letter says he's "been quietly doing my own version" of the pledge for years, but had "always believed that you don't really talk about giving; you just do it." Mayor Bloomberg, he says, convinced him that going public would encourage others. Mr. Turner's letter recounts a story about the night he won the 1997 Man of the Year award from the United Nations Association.

But Mr. Icahn's goes back further. It says he won the Starlight Foundation's 1990 Man of the Year Award, was named the Guardian Angel 2001 Man of the Year and also got the 100 Women in Hedge Funds Effecting Change Award. "I never considered going public with my intentions," Mr. Icahn's says. "However, I certainly see the value of a project that encourages wealthy individuals to step forward and commit to use their wealth for the common good."

In the Home Depot co-founder's letter, Mr. Marcus writes Mr. Buffett to thank him for a call about the pledge, which "brought back memories of our conversation 15 years ago when I tried to convince you to do the very same thing."

"The pledge was founded on the belief that a group coming forward to be explicit about their giving will help inspire conversations on the subject," a Giving Pledge spokesperson said, "both about how much to give as well as for what purposes and to what end."

On Friday, sitting on the Jersey train, Mr. Cooperman happened to joke that the conductor about to take his ticket might throw him from the train. She did: The train he was sitting on was going to stop in Newark, which was where he was headed, but he was supposed to be on another train. "Are you serious? Is there a difference in price?" he said. "They're evicting me. Should I tell them I'm doing the Giving Pledge?"

mabelson@observer.com

In this week's column, Mr. Niccolini shares a story about the private equity guru, former Commerce Secretary, public thinker, and billionaire Peter G. Peterson. Mr. Peterson "returned from Florida early," the restaurateur relates, "because he couldn't find a purveyor of his favorite Gold Toe socks. They're the only kind of socks he likes to wear, so he came back."

A spokesperson for Blackstone, the firm Mr. Peterson co-founded, did not immediately return an email. It is not clear if Steve Schwarzman, his co-founder, has sock preferences that may similarly interrupt the months-long trip to Paris he recently announced.

Update, 2:51pm: According to two hard-hitting articles on Gold Toe in the Post this past year, not only does Blackstone own the company, but it has been looking to sell it. Finding a buyer didn't go well, so Blackstone is now trying to arrange a loan for Gold Toe, which the sock company seems to badly need. "Other heavily-indebted companies," says the Post, "are likely watching." Perhaps Mr. Peterson was publicly extolling his high-quality, durable, comfortable sock of choice at the Four Seasons to gin up business?

Gertrude Stein by Pablo Picasso

The Metropolitan Museum of Art

1000 Fifth Avenue

If her Paris apartment was the draw for European and American artists alike, then the same holds true for Gertrude Stein's New York digs at the Met. Her portrait hangs in good company there, painted by her friend Pablo Picasso around 1906 before his Cubist style took hold. She sat a whopping 90 times for it, although Picasso painted her head (three times) without her. Curiously, the head is stylistically different from her body. When someone commented that Stein did not bear a likeness to her portrait, Picasso famously said, "She will."

www.metmuseum.org

Design for a Mirror Frame with the Monogram of Marie-Antoinette by Richard de Lalonde

Cooper-Hewitt, National Design Museum

2 East 91st Street

Before she was beheaded in 1793, Marie Antoinette, along with her husband, King Louis XVI, spared no expense in decorating her palaces. The pair sought out the designs of Richard de Lalonde, whose style was neo-Classical. Around 1790, the queen herself commissioned a garland-and-floral-inspired mirror with her monogram, which was first rendered in pen and black ink with a gray and yellow wash. The design had to be lavish to frame the queen's infamous coifs.

www.cooperhewitt.org

Mrs. Lewandowski, Munich, Ascona VIII by Josef Albers

Solomon R. Guggenheim Museum

1071 Fifth Avenue

There was something about Mrs. Lewandowski, lounging in a striped beach chair, that made her fit to be Josef Albers's subject in 1930. Mrs. Lewandowski, a colleague of the pioneering artist's wife, is photographed in a straw hat smiling into the sun. Albers, the Bauhaus-trained artist and former head of Yale University's Design Department, shows the passage of time in this black-and-white photographic series of four. Now, time stands still for Mrs. Lewandowski, as visitors go round and round at the Guggenheim.

www.guggenheim.org

Portrait of Adele Bloch-Bauer by Gustav Klimt

Neue Galerie

1048 Fifth Avenue

She hangs over the street Forbes once ranked the most expensive in the world. Her distinction: She is made of oil and gold on canvas and was sold to cosmetics mogul Ron Lauder in 2006 for a sum rumored to be $135 million, which at the time made her the most expensive painting in the world (only to be topped later that year by Jackson Pollock's Number 5, 1948 at a reported $140 million). Like Marie Antoinette, she was a fellow Austrian and patron of the arts. Her husband, a sugar baron, commissioned the portrait, which took three years to complete; it was finished in 1907. It is on display in the former Fifth Avenue home of the Vanderbilt family, now the Neue Galerie.

www.neuegalerie.com

Portrait of Sally Etting by Thomas Sully

The Jewish Museum

1109 Fifth Avenue

America's Jewish community was small in the early years of the 1800s, but thriving. Sally Etting was from one of the more prominent families of the time, based in Philadelphia and Baltimore. Her father, Elijah Etting, traded with Native Americans and supplied goods for the Revolutionary Army. But it was her politically active brother Reuben who may have commissioned this oil on canvas of his sister, in 1808. Favoring neoclassical clothing and coifs, Sally sat for painter Thomas Sully, who was called the "prince of American portrait painters" by historian William Dunlap. Philadelphia has named streets after the Etting family, which remained socially prominent and influential for decades, but Sally looks quite at home here on Fifth.

www.thejewishmuseum.org

Cindy Sherman, Untitled 2008

The Whitney Museum of American Art

945 Madison Avenue

Cindy Sherman, an American photographer and film director who lives in New York City, is known for her conceptual portraits in which she is her own subject. For more than 30 years, her themes have ranged from cowgirls to B-movie actresses to Renaissance-era royalty. In her photograph at the Whitney (a block off Fifth Avenue), titled Cindy Sherman, Untitled 2008, she plays the part of an uptown matron, overly coifed and in stiff couture. She once said, "When I look at pictures, I never see myself. They aren't self-portraits. Sometimes I disappear."

www.whitney.org

Costume of Gypsy Rose Lee

The Museum of the City of New York

1220 Fifth Avenue

Not quite in the museum's permanent collection, though she should be, legendary stripper Gypsy Rose Lee was a New Yorker for much of her life and a superstar of Minsky's Burlesque. Her deceptively demure costume is on view as part of the museum's elaborate "Notorious and Notable: 20th Century Women of Style" show, which runs through Jan. 2, 2011. Pinstriped, full-length and sedate, it looks like a perfect outfit for the proper Fifth Avenue women. But it buttons with snaps, for swift and easy removal.

www.mcny.org

Talk about an overreaction. In fact, the controversy should remind us that government officials, especially those engaged in international affairs, have gotten far too comfortable with secrecy, skullduggery and a general lack of accountability. History shows that secrecy only encourages governments to do what it knows, down deep, that it shouldn't be doing. Remember the Bay of Pigs? The Kennedy administration persuaded the media to keep quiet about that ill-starred adventure, and we all know how well that worked out, Years later, the Pentagon Papers ought to have proven once and for all that bad things happen when democratic countries plot overseas adventures in secret.

The information in these documents may be embarrassing, but not especially shocking. The Saudis are worried about a nuclear-armed Iran? That doesn't qualify as news, but the leaked memos to that effect at least remind us that Iran's madmen are a threat not just to Israel, but to regional and even global peace.

Woodrow Wilson's formula for a better world order was simple: Open covenants openly arrived at. Wilson's grammar wasn't perfect, but his sentiments are worth revisiting. Wilson, ever the idealist, wanted to see fewer secrets and more open government, even in the dark arts of international diplomacy. He'd understand why the WikiLeaks documents deserve to see the light of day.

The White House seems to think that these leaks will make it harder for U.S. diplomats and military chiefs to give candid advice and frank assessments. There's no question that the men and women who keep tabs on the world's bad guys need to be able to deliver bad news or unpalatable options to their bosses.

But a democratic nation with too many secrets is a democratic nation that may have lost its way.

"Are there hedge funds doing illegal things? I'm sure," the New York investor said from the office off his bedroom, where his wife was awake. The investigators, though, "are aggressively attempting to expand the definition of insider trading, and using these incredibly aggressive tactics that are business-threatening, and that combination is a dangerous brew."

He tried to troubleshoot his iPad as he talked. "They hate Steve Cohen. Why? Because he's really rich; he's worth billions; he's got a braggadocio art collection," he said. "If they nail that guy, it's a ticket to a $4 million-a-year white-collar job at Davis Polk. That's what motivates them! It's just a fact."

"For a government rooted in populism, arresting and prosecuting hedge fund managers serves to distract voters," a note from Monness, Crespi, Hardt & Co's Sydney Williams III declared earlier in the day. His firm is the quiet boutique brokerage that organized a private "idea dinner" for hedge funds this February, where a short talk from an SAC Capital manager about shorting the euro led to an investigation into collusion. "But it makes better headlines to go after 'evil' and 'greedy' hedge fund managers," the note's finale says. "In acting rashly, the wrong people are made to suffer."

This historically huge hedge fund raid, Wall Street thinks, is overzealous and underwhelming. For finance, it's been the year of the shrug. "When I read this," a former Lehman Brothers managing director told this newspaper when the firm's Repo 105 accounting scandal broke in March, "I giggle a little bit."

It was the same response when Goldman was sued a month later; the stock market collapsed in the so-called "flash crash" after that; and the foreclosure fiasco unfolded this autumn. To outsiders, those may have felt like crises that not only exposed systemic corruption and ravenousness, but could fundamentally change the way Wall Street makes its money.

But life went on. "They just want to be mad and don't know what they're talking about and want to be outraged," another Lehman alumnus, a senior executive, had said.

"It's just the scandal du jour, I suppose," a mortgage strategist at a recently subpoenaed hedge fund said on Monday. "I reckon we're all a bit jaded. So yeah, from my perspective, it's a 'jeez, here we go again,' laugh kind of thing."

BY THE TIME a Nov. 20 story went up on The Journal's Web site, announcing investigations into "multi-insider trading rings" that touched Goldman Sachs, UBS, Deutsche Bank and the multibillion-dollar fund Ziff Brothers, it had already been an odd month. On Nov. 10, the powerful Brooklyn rabbi Milton Balkany was convicted of trying to extort $4 million from Mr. Cohen's SAC in exchange for keeping quiet about insider trading. That day, it was reported that the billionaire Phil Falcone had angered Goldman by borrowing money from his own hedge fund to pay taxes.

The day before the story's debut, Bloomberg reported that FrontPoint Partners, famous for manager Steve Eisman's bet against the subprime housing market, was shutting down its $1.5 billion health care fund. Joseph F. "Chip" Skowron III, the fund's co-manager, and a former analyst at SAC, had allegedly acted on insider information about drug research. FrontPoint, which Morgan Stanley is in the middle of selling, was reportedly faced with billions of withdrawal requests, although its chief executives said in a letter to investors this month that it is "stable operationally and financially." Mr. Skowron, a handsome former Harvard physician who is said to carry a photo of himself with an ill child in a Kosovo operating room, is now on leave.

The Journal story said the insider-trading investigation was centered on expert networks like Gerson Lehrman, where consultants are paid as much as $1,000 per hour to provide "an investing edge" through information. John Kinnucan, a wonderful principal at one research firm, sent an email to clients declaring that he was on his porch sipping wine when he got a "gracious offer to wear a wire" from "two fresh faced eager beavers from the FBI," which he declined.

The note's recipients included billionaire Ken Griffin's Citadel and SAC. Indeed, ever since the arrests of the Galleon Group's Raj Rajaratnam and well over a dozen associates, including the cooperating witness and former SAC trader Richard Choo-Beng Lee, investigators' eyes have seemed to be on Mr. Cohen. On Sunday night, Reuters mentioned that ex-SAC analyst Jonathan Hollander's prosecutorial limbo. A former UBS investment banker said this year that he was given insider information from a managing director at the private-equity giant Blackstone, and also fed it to friends like Mr. Hollander.

BUT THE REAL action started on Monday. It was the Twin Peaks of Wall Street afternoons: wildly hard to follow but thrilling nonetheless.

The F.B.I. raided the $4 billion Level Global and $5 billion-plus Diamondback Capital, both Connecticut-based hedge funds run by former SAC traders. Level Global's Anthony Chiasson was recently a client of the wine-sipping Mr. Kinnucan, and also said to be an associate of Galleon's Todd Deutsch. His firm recently sold a stake to Goldman.

At Diamondback, meanwhile, cofounder Rich Schimel is Mr. Cohen's brother-in-law, and his COO John Hagarty had been COO at FrontPoint, Chip Skowron III's firm. Plus, the New York State pension fund, whose kickbacks scandal has ensnared the glorious financier Steve Rattner, said it had $225 million with Diamondback. Last year, the firm returned nearly $100,000 in profits and paid about $70,000 more to settle S.E.C. complaints about stock offerings.

But a third hedge fund, Boston's Loch Capital Management, was raided, too. It's run by twins, Todd and Timothy McSweeney, well known for their friendship with Steven Fortuna, one of the hedge fund managers who pleaded guilty in the Galleon case.

Naturally, Mr. Fortuna had been linked earlier in the month to a former SAC analyst, Mark Adams. Mr. Adams' more recent firm, Balyasny, has announced that it was subpoenaed, along with SAC Capital. Citadel was reportedly subpoenaed, too. So were the $161 billion mutual fund Janus Capital and $598 billion Wellington Management, other Kinnucan clients. On Nov. 24, the expert network Primary Global Research's Don Ching Trang Chu was arrested, a few days before leaving for Taiwan. "Don is just a fun person to travel with," an online biography says. Mr. Lee, the former SAC trader, had reportedly worked with him.

BUT WALL STREET is unimpressed. "They're pointing at everybody, it seems to me," former Goldman Sachs International president Roy Smith, now an N.Y.U. professor, said. "The present attitude about bankers on the part of the government is so negative that they assume every banker and every broker is inclined to do these kinds of things."

"I do think the press is playing very, very nicely into the hands of the government on this one. I think they're sensationalizing this thing in a huge way," a source close to Mr. Cohen said. "'Ooh, they're former SAC,'" he said with a singsong. "Just because they were former SAC guys doesn't mean it reflects on the SAC of today, the SAC of three years ago, the SAC of four years ago, the SAC of five years ago."

Is Mr. Cohen nervous? "Just because you got a subpoena doesn't mean you did anything. It's a request for information," the source said. "Let's just be clear."

"There are several different investigations that started out with a great deal of momentum, and if you look at where they ended up, there's a gap," a senior trader at a major bank said on Monday. Like the New York hedge fund manager, he complained that subpoenas crush reputations. "Are they causing more damage to the system than they're trying to fix? Fellas, what are you guys doing! We're in the midst of a crisis here; clearly, we want to weed out bad actors, but what is all this?"

In letters to investors, firms like Diamondback said federal investigators are interested in only "a single employee" (plus maybe "a former employee who reported to that employee"). "It feels like, O.K.," said the trader, "this is it, a couple of guys."

"I hope for the sake of regulators and law enforcement agencies that they actually have got something, because they've created a huge amount of smoke," said one senior executive at another major bank. Like the trader, the hedge fund manager, the mortgage strategist and the source close to Mr. Cohen, the executive agreed to share thoughts with The Observer only anonymously because of ongoing investigations. "And if the fire turns out to be small, it will be kind of embarrassing for them. But right now, the results don't seem to be breathtaking."

"It doesn't make me nervous," the hedge fund manager said late Monday night, annoyed that his digital copy of the new financial crisis book All the Devils Are Here wasn't downloading properly. "But it does make me concerned that I'm going to get some willy-nilly subpoena--and something to write about in the press. And it's going to concern my investors, and it'll be bad for business, and it will take however long to defend myself."

mabelson@observer.com

The firm had been pulled into the gargantuan insider trading investigations because of the charming Joseph F. "Chip" Skowron III, FrontPoint's health-care funds co-head. Mr. Skowron, a strongly chinned former Harvard surgeon who left for Wall Street, is said to carry a photo of himself in a Kosovo operating room with a sick child. He allegedly saved FrontPoint $30 million thanks to illegal information from a man named Yves M. Benhamou. He also drove a blue Ferrari 458.

"If I get even a whiff of an investigation, I want to get out before the next guy, especially if I know they have illiquid stuff or I don’t know what they have," the head of a fund of funds told the FT, which reports senior FrontPoint staffers "are interviewing for jobs with other firms."

Mr. Eisman did not immediately respond to an email. Nor did a spokesperson for Morgan Stanley, which announced it was selling its stake in FrontPoint earlier this year.

It has not been a good holiday for hedge fund moguls. Besides those investigations, Blackstone and Goldman Sachs have recently pulled money quite angrily from Phil Falcone.

Update: "As part of our effort to keep our investors informed, we would like to provide you with a business update," a memo today to investors from FrontPoint co-CEOs Dan Waters and Mike Kelly begins. The memo, obtained by the Observer, plays it cool: It says that about $1.5 billion of the $3 billion withdrawal requests are for the scandalized health care funds, and that, better yet, "we are working with several clients who have indicated that they may rescind their redemption requests." Some of the withdrawal requests, in other words, have been withdrawn; but FrontPoint doesn't say exactly how many. "We would like to emphasize," the memo's continues, "that FrontPoint remains stable operationally and financially."

Though Mr. Rattner's been more open about his feelings for the man, now that Mr. Cuomo has finally sued him because of a connection to the New York State pension fund kickbacks scandal, it's now official that the two are nemeses. There are times in the interview — never mind that Mr. Rose's show is financially backed by the financier, and the men are friends — that Mr. Rattner practically twitches with disgust at the mere topic. (Watch his face just after the nine-minute mark.)

And though Peter Lattman did a wonderful job of recapping the highlights, there are so many glorious lines that it's almost inevitable some would be left out. Consider, for example, what is probably Mr. Rattner's finest moment: "You were friends, you and the Attorney General?" Mr. Rose asks, after Mr. Rattner uses the word "charade" to describe the investigation.

"No," Mr. Rattner answers.

"You would characterize as 'not-friends?" Mr. Rose presses.

Then Mr. Rattner really gets going. "I would characterize it as a distant relationship. I was never a part of the Andrew Cuomo fan club." Snap! "We knew each other from Democratic politics, he certainly tried to cultivate my support, going back to when he was at HUD, and had me into lunch in the Secretary's dining room, and so on and so forth. But I was frankly," he says, raising his eyebrows momentarily, "never president of his fan club, or even a charter member." Damn.

ABC News likes the quote, too, though its headline does not give Mr. Rattner's word choice its full due.

His daughter had decided to send her Tamagotchi toy pet to work with him, and it was hungry. Mr. Calello stopped the meeting, according to Wilson Ervin, one of the other executives there, took the pet out, smiled and fed it a digital hamburger.

The financier, who became chief of Credit Suisse's investment bank in 2007, when cuts to risk and costs helped make the giant one of the few that weren't bailed out, died on Nov. 16 of non-Hodgkin's Lymphoma. He was 49.

There is something about Wall Street executives who are as important as Mr. Calello--who four years ago helped arrange Industrial & Commercial Bank of China's record-setting $21.9 billion IPO--that makes them difficult. People who dominate high finance do not tend to enchant outside of it. "He's the heart of our family, center of the swirl, itchy instigator of the well spent day, pied piper of not just adventure, but intellectual curiosity and passion," one of his three sisters, the poet Cathy Staples, wrote. "Passionate engagement in the world has never been a solo adventure for Paul, he's intent upon bringing us all with him."

"He didn't sacrifice other parts in order to do what he did well," said his brother-in-law, Alex Gibney, the documentarian who made Enron: The Smartest Guys in the Room and Taxi to the Dark Side. "He was just generous as a person, always thinking about other people. It sounds so corny to say, but that's what was so miraculous."

He was short-listed to replace Tim Geithner at the New York Fed last year. Two of his neighbors in Beaverkill, N.Y., the conservationist Laurance Rockefeller Jr. and the former Massachusetts governor Bill Weld, both said he could have eventually been secretary of the Treasury.

But those neighbors also talk about the Calello house's musicales, where the executive and one of his sisters played guitar and their father sang in a self-taught operatic voice. "Uproarious fun," Mr. Rockefeller said. Others brought Dobros and 12-strings. They played songs like Lowell George's "Willin'" and John Prine's "Angel from Montgomery."

He sang with his family a few days before his death.

BORN TO SOCIAL workers, Mr. Calello was raised outside of Boston. He burst with energy, Mr. Gibney said, causing a bit of a ruckus on school bus rides. It was suggested that he and a friend run to school, which they found too boring, so they would run past it and back, ready for the day. "I'd watch him out the school bus window, running," Ms. Staples wrote, "swag of dirty blond hair crossing his eyes, stride loose and easy, and, if he saw me or my sisters, that grin." He tried to run the Boston Marathon at 11 and 12, and succeeded at age 13. He gave up marathons after that.

He met his wife, Jane DeBevoise, at Bankers Trust in Tokyo, where they bonded over a 20-year yen-dollar amortizing swap for United Airlines. Mr. Gibney was living a more bohemian life when he first met the banker. "I looked at him: tassel loafers, no socks. I thought, 'Oh, brother,'" he said. "I underestimated the depths of the man on that first encounter, but I never did it again."

Mr. Calello left Bankers Trust to co-found Credit Suisse Financial Products, a derivatives giant. "He was the first industry leader to advocate consistent, effective regulation of derivative instruments globally," a memo to staff from Credit Suisse CEO Brady Dougan says, "at a time when this was highly controversial."

By 2002, he'd become CEO of the investment bank in Asia. "We've been on holidays together," Ronald Arculli, the chairman of the Hong Kong stock exchange, said. "Occasionally my wife would joke and say, 'I wish you'd sound like Paul.'"

At a family trip to Mr. Weld's house in Keene Valley, the governor's wife, Leslie Marshall, woke up at 5 a.m. "There was Paul, sweeping the kitchen and making sandwiches," she said, "ready to launch everybody on the day."

"Family was paramount and work was just work, and that's not the vibe you feel with most senior executives. Some don't even talk about their families, as if they're invisible, or verboten," said Credit Suisse's Grace Koo, who heads a team that structures derivatives for clients. "He's let me scroll through his digital camera when we were on conference calls."

He came back to New York in 2007 to helm Credit Suisse's investment bank. Mr. Ervin, then the firm's chief risk officer, and now a senior adviser to Mr. Dougan, said that Mr. Calello understood the intensity of what was happening, and what was about to happen. In September 2008, as Lehman and AIG quaked, he was one of the senior executives brought to the New York Fed to work on saving the system.

In December, he and Mr. Dougan announced that executive bonuses would be paid in toxic assets. "He was one of the executives who really did lament the excesses of Wall Street," Ms. Koo said. "And really did say so."

In the middle of 2009, he mentioned to colleagues that he wasn't feeling well. "He said, 'I haven't been feeling up to my game,' which is unusual for Paul; he was one of those guys that needed about 15 minutes of sleep and was game," Mr. Ervin said. "We attributed that to the strain he was under."

In September, after his cancer diagnosis, the bank announced he was stepping down temporarily. "You could see it slow him down emotionally once or twice, briefly," Mr. Ervin said, "but then he would climb back in, and say, 'How about you? How are you doing?'"

This year, he was named chairman of the investment bank. He was still coming to Credit Suisse about a month before his death. "He was thinner, his hair was gone, but his voice was strong, his intellect was strong," Mr. Ervin said. "He'd take his Vespa in."

"What did occur," Mr. Rockefeller said, "was a very full life of great success."

He is survived by Ms. DeBevoise, a daughter, triplet sons, three sisters and his parents.

mabelson@observer.com