Two Ex-Galleon Employees Plead Guilty

Jan 26 2011 | 12:46pm ET

Prosecutors are set to win two more guilty pleas in the Galleon Group insider-trading case—and two more possible witnesses against Galleon founder Raj Rajaratnam—today.

Michael Cardillo and Adam Smith will be the 18th and 19th people to plead guilty in the case; neither has previously been charged. Both, former Galleon employees, are cooperating with the investigation.

Smith, who has also been sued by the Securities and Exchange Commission, entered his plea earlier today in Manhattan federal court; Cardillo, previously a confidential witness in the case, will appear later today.

“I spoke with Raj Rajaratnam over the telephone in New York and communicated non-public information,” Smith said this morning.

According to the SEC, Smith, who last year planned to launch a new hedge fund with a pair of other Galleon traders, “reached out” to an investment banker for information about ATI Technologies, which was involved in confidential talks about an acquisition with Advanced Micro Devices.

“Smith caused certain Galleon funds that he managed to trade on the basis of the material non-public information he received from the investment bank source,” the SEC said in its complaint. “Upon receipt of the information, Smith substantially increased the size of an existing ATI long position that the Galleon funds he managed had in place.”

Rajaratnam is set to face trial late next month. Another former Galleon trader, Zvi Goffer, who allegedly headed one of the two interlocking insider-trading circles in the case, will go on trial on May 9.


In Depth

Direct Lending: What’s Different Now?

Mar 14 2017 | 8:43pm ET

Senior direct lending funds have become riskier over the past four years, with leverage...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of