A federal grand jury has issued indictments against the founder of the Galleon hedge fund Raj Rajaratnam and against Danielle Chiesi, a former Bear Stearns employee, according to the Financial Times.

The two are accused with four others in relation to insider trading allegations.

The case, added to other high-profile alleged financial misbehaviour and scandals in the financial markets, especially that of Ponzi fraudster Bernard Madoff, highlight how due diligence checks on investments is a crucial issue for wealth managers and their clients.