Did The FBI Cause a Jew To Hang Himself?

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A Trader, an F.B.I. Witness, and Then a Suicide

In a Manhattan courtroom last week, federal prosecutors played for a jury a secretly recorded telephone conversation between two Wall Street traders exchanging stock tips. Two days later, one of those traders, Ephraim G. Karpel, hanged himself in his Fifth Avenue office, according to a law enforcement official.

Mr. Karpel was never charged with any wrongdoing, and until last week his name had not emerged in connection with the government’s vast investigation of insider trading.

Yet while working for a New York commodities firm, he had agreed in 2008 to cooperate with federal authorities...

“The government’s investigation changed his life forever and was his unraveling,” Fran Karpel, his wife, said in a telephone interview from her home in Livingston, N.J. “He sank deeper and deeper into a hole and couldn’t see a way out.”

...None of Mr. Karpel’s former employers has been accused of any wrongdoing.

...for the first time in an insider trading inquiry, the government has been using wiretaps — a method typically reserved for drug crimes and organized crime cases — to record the telephone conversations of Wall Street traders.

In one instance, the government came under official criticism for its wiretap practices. Earlier this year, Judge Richard J. Sullivan rebuked law enforcement officials for monitoring an intimate call between a trader and his wife...“The court is deeply troubled by this unnecessary, and apparently voyeuristic, intrusion,” wrote Judge Sullivan, a federal judge in Manhattan.

It was wiretaps that led the F.B.I. to confront Mr. Karpel on the street.

...Representatives of the F.B.I. and the United States attorney in Manhattan declined to comment.

...“Our lawyer said, ‘You can only discuss this with me, your rabbi or your therapist,’ ” Ms. Karpel said. “We didn’t have therapists and we belonged to a synagogue but didn’t want to talk to our rabbi, so we kept it a secret from everyone, even our family.”

“We were terrified,” Ms. Karpel added. “We had nobody to turn to.”

Ms. Karpel said her husband had been in horribly conflicted about his cooperation. She said he had been so worried about entrapping his friends that he began cutting himself off from Wall Street contacts.

By mid-2009, the F.B.I. began to lose interest in Mr. Karpel, according to his wife, and stopped asking for his help.

...[after being fired] In recent months, Mr. Karpel had been in talks to join Javelin Partners, a fledgling Toronto firm that advises small mining companies. He never joined the firm but had been subleasing space at Javelin’s New York office on lower Fifth Avenue, which is where he was found.

After he lost his job at Tigris he became very depressed, Ms. Karpel said.

“He loved Wall Street and he loved his friends there,” she said. “He felt like he had to reinvent himself.”

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