The news at a glance

Insider trading: A massive case set to explode

Federal authorities this week prepared to file charges in a sweeping investigation that has “the potential to expose a culture of pervasive insider trading in U.S. financial markets,” said Susan Pulliam and Michael Rothfeld in The Wall Street Journal. The Securities and Exchange Commission and the Justice Department are focusing on “potential leaks on takeover deals going back to at least 2007.” As part of the investigation, FBI agents this week raided the offices of three hedge funds: Loch Capital Management, Level Global Investors, and Diamondback Capital Management, seeking evidence of “serial insider trading,” said a U.S. official.

The investigation is likely to expose the role of so-called expert networks, said Henry Blodget in BusinessInsider.com. That’s the industry term for consultants who arrange meetings between industry insiders and professional investors, who “use these networks to gather information about real-time business conditions and trends in various industries.” Some of those insiders may have passed along non-public information, which is potentially illegal, investigators said. Such networks should remind small investors that no matter how diligent they are, the professionals always have the edge. Why do small investors play a game “they are almost sure to lose”?

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Drugs: ‘Dangerous’ Darvon pulled from market

With safety concerns mounting and federal regulators exerting pressure, Xanodyne Pharmaceuticals agreed last week to stop selling the painkillers Darvon and Darvocet, said David Freeman in CBSNews.com. “The medicines have been subject to safety concerns for decades,” and a recent study suggested that “Darvon interferes with the electrical activity of the heart.” Consumer advocates criticized the Food and Drug Administration for taking so long to act against a 50-year-old drug.

Pensions: Rattner faces lifetime ban

Former “car czar” Steven Rattner agreed last week to pay the U.S. $6.2 million and accept a two-year ban from the securities industry to settle pension-fraud charges, but his legal troubles aren’t over, said Joshua Gallu and Karen Freifeld in Bloomberg.com. New York state last week said it is suing Rattner for $26 million and demanding his “immediate lifetime ban” from the state’s securities industry. The suit alleges that Rattner paid kickbacks in order to win state pension business for Quadrangle Group, which he headed at the time. Rattner denied the charges. Quadrangle, meanwhile, plans to change its name and re-form as an asset-management business.

Computers: Did Dell hide big problems?

Documents unsealed last week in a three-year-old lawsuit against Dell suggest the computer maker tried “to hide defects in its desktop computers from customers,” said Ashlee Vance in The New York Times. The documents, filed as part of Advanced Internet Technologies’ suit against Dell, reveal that AIT and “dozens” of other customers, including General Electric and the City of New York, experienced defects in as many as 20 percent of their Dell machines. AIT alleges that Dell hid the problems and resisted repairs; Dell says it has improved its systems.

Video: Netflix banks on Internet streaming

Netflix is shifting gears, said Austin Carr in FastCompany.com. The video-rental outfit this week unveiled a new subscription plan that, for $7.99 a month, allows customers to stream its “expansive library of TV and movie content” directly to computers. Meanwhile, Netflix is discouraging physical DVD rentals by raising the monthly subscription rate by $1 a month, to $9.99. CEO Reed Hastings said Netflix is now “primarily a streaming company that also offers DVD-by-mail.”