Federal prosecutors have charged a further 14 people as the investigation into insider trading at Galleon Group, the New York hedge fund manager, widened to take in other hedge funds and a prominent law firm.

The Federal Bureau of Investigation (FBI) arrested eight people in New York, New Jersey and Connecticut this morning.

Those arrested are among 14 "attorneys and Wall Street professionals" charged over their alleged involvement in a $20 million insider trading ring, the United State Attorney for the Southern District of New York said in a statement.

Preet Bharara, the US Attorney, will give more details of the charges at a noon press conference in Manhattan.

It is reported that the charges involved workers at Galleon, the hedge fund manager at the center of an existing insider trading investigation.

Raj Rajaratnam, Galleon's founder, is free on $100 million bail after he was among six people charged with insider trading three weeks ago.

Valerie Ann Szczepanik, an attorney with the Securities and Exchange Commission, which also brought civil charges in the Galleon case, had warned on Wednesday that ``there is a real possibility that we will be adding additional parties'' to the six people originally charged in the Galleon investigation.

Galleon said last month that it would unwind its funds after the business was hit by Mr Rajaratnam's arrest.

In a letter to investors yesterday, Galleon said that its funds performed well in October and had now mostly been moved into cash. Rival businesses were making inquiries about acquiring Galleon's employees, the letter said.

Galleon is on track to start returning money to investors shortly after November 30.

Mark Kurland, chief executive of New Castle Funds, the hedge fund manager, and New Castle consultant Danielle Chiesi were charged alongside Mr Rajaratnam last month.

In a letter to investors, New Castle said that it was lowering its fees and restructuring its funds, and would not pay Mr Kurland's defence costs.

All six original defendents have protested their innocence.

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