Prosecutors Talk Settlement With Some Galleon Defendants

Aug 2 2010 | 8:27am ET

Federal prosecutors have held settlement talks with some of the nine defendants who have not (yet) pleaded guilty in the Galleon Group insider-trading case. But Galleon founder Raj Rajaratnam and his co-defendant, Danielle Chiesi, are apparently not among them.

On July 13, Reed Brodsky, an assistant U.S. attorney in Manhattan, said that prosecutors have had “conversations with counsel for individuals, including cooperating witnesses and defendants, regarding dispositions in connection” with the Zvi Goffer criminal investigation. Goffer, who has pleaded not guilty, is the former trader at hedge funds Incremental Capital and Schottenfeld Securities who allegedly headed one of the two interlocking insider-trading rings in the case.

The three-week old declaration by Brodsky was made public last week, and came three days before David Plate, a former Schottenfeld trader, pleaded guilty as part of a deal with prosecutors. He was the 12th person to do so in the case.

It is unclear whether Brodsky was referring only to Plate, or if any of the remaining Goffer circle co-defendants, Arthur Cutillo, Craig Drimal, Emanuel Goffer, Jason Goldfarb and Michael Kimelman, are talking about cutting a deal with prosecutors.

Galleon's Rajaratnam and Chiesi, a former executive for hedge fund New Castle Partners, are not part of the Goffer circle.

Also last week, U.S. District Judge Richard Sullivan—who is overseeing the Rajaratnam criminal trial—denied a defense bid to get additional materials held by the Securities and Exchange Commission. Brodsky had told Sullivan that his office’s talks were “separate and apart from any conversations between the staff of the SEC and” the defendants that prosecutors were discussing settlements with.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note