Pirates Of The Manhattan: At World's End

The Galleon Group insider trading scandal is getting bigger, now involving employees of Moody's as well.

The growing insider-trading scandal involving the hedge fund Galleon Group has now led to charges against 14 people, including an employee of the ratings agency Moody's Investors Service, CNBC has learned.

Federal and state authorities plan to announce the new charges—including nine charged today—at a news conference at noon EST.

According to an SEC complaint, the Galleon insider trading scandal involved stocks of 10 different companies, including Google, Hilton Hotels and Intel .

The Moody's employee, identified as Deep Shah, is alleged to have tipped the insider trading ring about potential developments that could impact the price of a particular stock.

Besides the Moody's employee, those charged include an attorney with the law firm Ropes & Gray and former employees of Incremental Capital hedge fund and the trading firm Schottenfeld Group.

One of those charged, a trader identified as Zvi Goffer, worked at Shottenfeld, then at Galleon and then worked at his own firm, and was considered a ring-leader of an insider trading network that began in 2007.

Goffer allegedly set up tipsters with pre-paid cellular phones and paid them cash in exchange for tips, primarily about private-equity deals.

It was a pretty intricate deal, looks like. But the expansion of the case to include an employee from one of the ratings firms should really, really drive home what kind of conflict of interest these ratings firms are in the first place, and how they are in part responsible for the financial meltdown.

When everybody was basically AAA, the ratings themselves became worthless. That of course led to things not being AAA as being listed as such, and the rest of course is history.

That history is repeating itself.