Wednesday, 24 August 2016
Last updated 48 min ago
Jan 5 2011 | 11:38am ET
Five defendants in the Galleon Group insider-trading case, including two former Galleon traders, will have to face trial after a judge dismissed their bid to dismiss the cases against them.
The five, led by former Galleon trader and Incremental Capital founder Zvi Goffer, saw their bid rejected today by U.S. District Judge Richard Sullivan. The federal judge also handed down some potentially worse news: As in the trial of Galleon founder Raj Rajaratnam, tens of thousands of wiretaps at the heart of the government’s case will be admitted into the Goffer trial.
According to prosecutors, Goffer was the head of one of the two interlocking insider-trading rings in the case; Rajaratnam was part of the second. Goffer allegedly gave sources prepaid cellular phones to call in their tips, paying those sources for the confidential information. Goffer’s ring allegedly turned $20 million in illegal profits.
But Goffer and his co-defendants, his brother Emanuel and Michael Kimelman, both of Incremental, Craig Drimal, a former colleague of Goffer’s at Galleon, and Jason Goldfarb, a lawyer at the law firm which allegedly provided many of Goffer’s tips, said that the case against them was based on a “convoluted theory” of insider-trading. What’s more, what evidence prosecutors did offer failed to meet the standard for insider trading.