On the afternoon of October 16—65 days into U.S. Attorney Preet Bharara’s reign of prosecutorial terror—the phone rang in the Murray Hill office of defense attorney Ravi Batra.

On the other end, a concerned hedge-fund executive wanted to schedule an emergency Saturday meeting to discuss the day’s news: Mr. Bharara—an affable 41-year old native of India and the latest chief of the Southern District of New York—had just announced that his office was bringing…