Halls of Justice

The head of Long Island investment firm Melhado Flynn & Associates was sentenced to 8 years in prison for illegally cherry-picking profitable trades for two hedge funds he controlled.

Goldman Sachs is in settlement talks with an Australian hedge fund that collapsed after losing millions on a collateralized debt obligation structured by the Wall Street giant.

Basis Capital Management, whose Yield Alpha Fund filed for bankruptcy three years ago, was burned by a CDO similar to the one at the center of the Securities and Exchange Commission’s fraud case against Goldman.

Twenty-one people have been charged in the Galleon Group insider-trading case. Two others may soon join them, according to a court decision this week.

The Colorado Securities Commission has seized the assets of Seam Mueller and his Mueller Capital Management, less than a week after Mueller was talked down from a building in suburban Denver.

Gartmore Group has reinstated suspended hedge fund Guillaume Rambourg, despite finding that he violated firm rules.

A former hedge fund trader has been charged with insider trading in the latest case brought by an increasingly active U.K. Financial Services Authority.

The Securities and Exchange Commission is investigating hedge funds’ use of side-pockets during the financial crisis.

A new SEC enforcement unit focused on asset managers is working on two side-pocket cases it plans to bring before the Commission within six months, The Wall Street Journal reports. The regulator is also continuing its probe into New York-based hedge fund Ram Capital Resources’ use of side-pockets.

Citadel Investment Group founder Kenneth Griffin remains loyal to Goldman Sachs, and blasted Democrats for using the fraud charges against the Wall Street giant to push their financial reform proposals.

SpongeTech last week accused Timothy Sykes, New York Post reporter Kaja Whitehouse and blogger David Patch of conspiring to drive down the company’s stock price to benefit short sellers.

Burton Wiand delivered some bad news to investors yesterday: He’s only been able to recover about 5% of the $168 million they lost in the scam.