A federal jury last week answered a challenge that armies of government regulators and enforcement officials largely have ignored: The jurors convicted a major Wall Street financial figure for crimes committed during the sleaziness that led to the 2008 financial collapse.

Raj Rajaratnam, 53, once the manager of the Galleon Group, one of the largest hedge funds in the world, was convicted Wednesday on 14 counts of fraud and conspiracy in U.S. District Court in Manhattan.

In 2008, before his troubles began, Forbes magazine estimated his worth at $1.8 billion, making him the 232nd-richest American. When he’s sentenced in July, he could become the richest American ever to go to prison.

Rajaratnam was convicted of insider trading: systematically gathering inside investment information from a network of corporate insiders and hedge-fund traders. The government charged that he made $45 million from his inside deals.

The obvious question is why someone worth $1.8 billion would risk 20 years in prison to make what is, by his standards, a paltry $45 million?

Preet Bharara, the Indian-born U.S. Attorney for the Southern District of New York, whose office prosecuted the Sri Lankan-born Rajaratnam, provided an answer in October 2009, when he announced Rajaratnam’s arrest: “Greed, sometimes, is not good.”

On the other hand, there was little reason for Rajaratnam to think that he was going to get caught, or that if he was caught, to be prosecuted, or that if he was prosecuted, to be convicted.

In the mid-2000s, when Rajaratnam’s business was booming, financial fraud cases were not at the top of the Justice Department’s priority list. Wall Street’s big banks were in an era of “voluntary regulation,” so the targets generally were low-level Ponzi schemes and investment fraud. A high-profile target like Bernie Madoff, arrested in December 2008 on charges of running a $50 billion Ponzi scheme, was the exception, not the rule.

That began to change in November 2009 with the creation of the Financial Fraud Enforcement Task Force. Within a 100-day period, the task force brought fraud charges against 310 criminal defendants and 189 civil defendants.

In Manhattan, Bharara’s office began using wiretaps ― a tool generally reserved for drug dealers and organized crime figures ― against financial targets. Wiretaps are expensive and labor intensive ― they have to be monitored and turned off when targets discuss topics unrelated to the investigation. But as the case against Rajaratman showed, wiretap evidence can be extraordinarily persuasive to juries.

The mere possibility that an FBI agent could be listening might make at least a few of these crooks think twice.

The next step for the Justice Department should be to extend its prosecutorial zeal to the banking industry. To date, the government has concluded only one successful criminal prosecution related to the vast web of mortgage fraud that underlay the financial collapse of 2008. Last month, an Ocala, Florida, mortgage lender named Lee Farkas was convicted on 14 counts of bank fraud.

Ocala, Florida, is a long way from Wall Street, where, since 2009 ― when a pair of Bear Stearns bankers beat a criminal charge of bilking investors out of $1.6 billion ― the government hasn’t even brought a criminal case.

There have been civil charges, settled with tepid non-admissions and fines levied against institutions, not individuals. Even “Fabulous” Fab Tourre, the Goldman Sachs trader who boasted in e-mails about his role unloading securities he knew to be dogs, has escaped prosecution. Goldman paid a $550 million fine.

There’s still plenty for prosecutors to pursue. Last month, the U.S. Senate’s Permanent Subcommittee on Investigations released a massive 650-page road map called “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse.”

The subcommittee chairman, Sen. Carl Levin, D Michigan, sent the investigative materials to the Justice Department, saying, “In my judgement, Goldman clearly misled their clients and they misled the Congress.”

Nice as it is to see them convicted, people like Raj Rajartman and Lee Farkas aren’t the biggest fish in the sea. There are sharks swimming free.

(The St. Louis Post-Dispatch, May 16)