NEW YORK—Three hedge-fund traders were convicted Monday on all charges of fraud and conspiracy, in the latest victory for prosecutors cracking down on insider trading in corporate America.

The verdict by the 12-member jury, in its fifth day of deliberations, comes about a month after Galleon Group founder Raj Rajaratnam was found guilty of insider trading in a separate but related case.

Zvi Goffer, a former employee at Galleon whom prosecutors called the "ringleader" of a scheme involving traders and lawyers, was found guilty of 14 counts of conspiracy and securities fraud. His brother Emanuel Goffer and Michael Kimelman, who are both traders, were each convicted of conspiracy and two counts of securities fraud.

They face up to 20 years in prison on each securities-fraud count and a possible five- year sentence on each count of conspiracy. They remain free on bail pending sentencing. Zvi Goffer is set to be sentenced Sept. 21; Emanuel Goffer and Mr. Kimelman are set to be sentenced Oct. 7.

Michael Kimelman Bloomberg News

Monday's verdict is likely to bolster the strategy of investigators of using wiretaps, traditionally employed in pursuing mobsters, against traders and others in efforts to prosecute white-collar crimes. Like Mr. Rajaratnam's trial, the five-week trial of the traders that started just days after the hedge-fund titan was convicted, largely focused on dozens of secretly recorded wiretaps and recordings by a cooperating witness presented by the government.

Manhattan U.S. Attorney Preet Bharara said that with Monday's verdict, "each and every one" originally arrested in the Galleon insider-trading investigation since the probe first surfaced in November 2009 had been convicted.

The office has multiple insider-trading investigations going on. In the past 18 months, 49 hedge-fund managers and others have been charged with insider trading; 43 have been convicted or pleaded guilty.

Another insider-trading case involving wiretaps is playing out in the same courthouse in lower Manhattan. Winifred Jiau, a former consultant, is on trial in a case involving expert-network firms, which matches company insiders freelancing as consultants with hedge funds and other clients for a fee. She has pleaded not guilty.

The trial of Mr. Goffer and his associates offered a window into the extent the three traders went to hide their activities from authorities by using prepaid phones—one trader allegedly dubbed his the "Bat" phone—and creating fake paper trails.

Emanuel Goffer, right. Bloomberg News

The traders also gave one another nicknames: Zvi Goffer was dubbed "Octopussy"—a reference to the James Bond movie—by the other members because he had so many sources of information, according to related civil complaint filed by the Securities and Exchange Commission in 2009.

Prosecutors had alleged that Zvi Goffer, 34 years old, paid nearly $100,000 in exchange for the confidential information. The SEC, in its suit, alleged that one part of the scheme—based on tips from two former Ropes & Gray LLP lawyers—netted more than $20 million in illegal profits.

As the verdict was read on Monday morning, Zvi Goffer wiped his eyes while his brother and Mr. Kimelman stared straight ahead, looking away from the jury.

During the trial, none of the defendants testified in their own defense. Zvi Goffer's attorney called no witnesses. Emanuel Goffer's lawyer only submitted a limited number of documents during the defense case while Mr. Kimelman's lawyer called one witness.

“ Zvi Goffer may have had a reputation in the hedge-fund world for being ubiquitous, but today he, along with his brother, Emanuel, and Michael Kimelman, discovered they are not above the law. ” — Manhattan U.S. Attorney Preet Bharara

Lawyers for Zvi Goffer and the 40-year-old Mr. Kimelman, who argued that their clients traded only on public information, said on Monday that they plan to appeal the verdict. They are likely to challenge a judge's ruling allowing the wiretaps into evidence, legal experts say.

"While we're disappointed with the jury's verdict, it was a very difficult case and we respect their decision," said David Pettus, a lawyer for Zvi Goffer.

In order to challenge the impact of the wiretap evidence, William Barzee, a lawyer for Zvi Goffer, said in his closing argument that his client was a "habitual exaggerator" in order to inflate his image and that traders often lie to each other. "He wants to pretend he has inside information, he has an edge," Mr. Barzee said.

"We are enormously disappointed with the verdict as we believed the evidence clearly showed that Mr. Kimelman had not engaged in any insider trading," Michael Sommer, one of his attorneys, said.

A lawyer for Emanuel Goffer, 32, declined to comment.

In addition to the wiretaps, four cooperating witnesses who have pleaded guilty to criminal charges testified against the men during the trial. The witnesses included former Ropes & Gray lawyer Brien Santarlas, who said that he and another former lawyer from the firm passed nonpublic information about the law firm's clients to Jason Goldfarb, a private-practice lawyer and childhood friend of Zvi Goffer. Mr. Goldfarb pleaded guilty to criminal charges in the matter.

The deals involved in the scheme, according to prosecutors, included Bain Capital's failed bid for 3Com Corp. in 2007 and TPG Capital's bid to acquire Axcan Pharma Inc. in 2007. Prosecutors said the 3Com deal alone led to about $1.35 million in profits, though they did not give a total figure of the profits made from the overall scheme.

Ropes & Gray has said the actions by two former lawyers "represent an extreme breach of their duty of trust to our clients and the firm, as well as gross violations of our policies and civil and criminal law." It is cooperating in the probe.

Prosecutors described the methods the conspirators used to conceal their improper trades. Mr. Santarlas testified that he was given a prepaid phone by Mr. Goldfarb to share tips and he understood that Mr. Goldfarb communicated with his trader friend on a separate prepaid phone.

David Plate, a former Schottenfeld trader and cooperating witness, testified that he was given a prepaid phone by Zvi Goffer in order to discuss sensitive information about stocks and that he threw it away after Mr. Rajaratnam's arrest in October 2009.

Michael Cardillo, a former Galleon trader and cooperating witness, testified that Craig Drimal, an unaffiliated trader working in Galleon's offices, communicated with Zvi Goffer on prepaid phones, sometimes calling it the "Bat phone." Mr. Cardillo was nicknamed "Dillo" and Mr. Drimal was sometimes called "Ruby," according to testimony at trial.

Messrs. Plate, Cardillo and Drimal have all pleaded guilty to criminal charges.

Write to Chad Bray at chad.bray@dowjones.com

Corrections & Amplifications:

Scott Tenley, a lawyer for Michael Kimelman, one of the co-defendants, was misidentified as Emanuel Goffer in a photo caption in an earlier version of this story.