Monday, 28 July 2014
Last updated 7 hours ago
Nov 15 2010 | 11:35am ET
Two more people have pleaded guilty in the Galleon Group insider-case.
Thomas Hardin and Franz Tudor, who are both cooperating with investigators, entered their pleas last year. Hardin is “Tipper X,” described in court papers as the link between the two alleged interlocking insider-trading rings in the case, and Tudor is one of the cooperating witnesses who wore a wire for prosecutors.
Hardin and Tudor, whose agreement to plead guilty was first reported earlier this year, bring to 14 the number of people who have pleaded guilty in the case, which has ensnared 23 people, including Galleon founder Raj Rajaratnam. Both men face up to 25 years in prison on the conspiracy and securities fraud counts, although prosecutors plan to ask for leniency on account of their cooperation.
Both men—and Hardin’s former employer, hedge fund Lanexa Global Management—have also been sued by the Securities and Exchange Commission. According to the SEC, Hardin’s illegal trades on behalf of Lanexa earned the hedge fund more than $1 million. Lanexa fired Hardin in January 2009, it said.
“When greed leads hedge funds and other market professionals to illegally trade on inside information, the SEC will take aggressive action,” Robert Khuzami, enforcement director at the agency, said.
According to prosecutors, Hardin received insider tips about Hilton Worldwide, Google and Kronos Worldwide both from Roomy Khan, the former Galleon employee and Intel Corp. executive linked to Rajaratnam and his alleged side of the insider trading rings, as well as from Gautham Shankar, a former trader at Schottenfeld Group and an alleged member of the insider-trading ring prosecutors say was led by former Galleon trader and Incremental Capital founder Zvi Goffer. That makes him the only known link between the two alleged circles.
Hardin pleaded guilty on Dec. 21.
Tudor entered his plea on Oct. 29 last year, prosecutors said. He is a former trader at Galleon and also worked at Schottenfeld and Goffer’s Incremental Capital. Tudor reportedly wore a wire to record conversations he had with Goffer and Michael Kimelman, also of Incremental. Both Goffer and Kimelman, and five other linked to the so-called Goffer circle, have pleaded not guilty in the case, as has Rajaratnam.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…