When Adam Smith pleaded guilty to insider trading charges, he became the 18th person to cop a plea in what looks to be a historic crackdown on insider trading, one that has spread its tentacles to big-name hedge funds, elite companies and various expert network companies.

Before a U.S. District Judge, Adam Smith admitted that between 2003 and 2009 he learned the details of several mergers and earnings news reports and provided the information to the infamous Raj Rajaratnam, the man that prosecutors will paint as the Invisible Hand behind the massive scheme.

Adam Smith plays to that effort. He is yet another cooperating witness that Rajaratnam's defense team will have to contend with. He is suitably incented to provide solid information against Rajaratnam.

Smith faces up to 20 years in jail. Bail was set at $100,000 and sentencing for October 21, notes Reuters.

All in all, the prosecution is lining up its ducks for what will be one of the most closely watched trials in years. Danielle Chiesi, thought to be a key player, has also struck a deal recently.

Rajaratnam's trial is scheduled to begin in late February. There is still the possibility of a settlement. But you get the feeling he is digging in.

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