Convicted Galleon Insider Trader Wants New Trial

Jul 13 2011 | 11:09am ET

Michael Kimelman, the former hedge fund trader who rejected a no-jail deal in the Galleon Group case only to face 25 years after his conviction, is unsurprisingly none-too-happy with the outcome of his trial. So he's asking for a do-over.

Kimelman, who worked at hedge fund Incremental Capital, has asked a court to throw out his conviction on conspiracy and securities fraud charges and to grant him a new trial. Kimelman was convicted alongside Incremental founder Zvi Goffer, a former Galleon trader, and his brother, Emanuel Goffer, last month.

The twist is that prosecutors offered Kimelman a probation-only plea deal just before the start of the trial that convicted him. His lawyer, Michael Sommer, wrote at the time that the decision "is probative of a state of mind devoid of guilty knowledge," but U.S. District Judge Richard Sullivan barred him from mentioning the rejected deal at trial.

Now, Sommer is back, claiming in a Monday court filing, "there was simply no evidence presented that Mr. Kimelman knew—or even consciously avoided knowing—that Zvi Goffer posssessed insider information about 3Com [Corp.] in August or September 2007."

Kimelman and the Goffers were convicted just weeks after Galleon founder Raj Rajaratnam suffered the same fate.

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