Ex-Goldman Banker Won’t Be Charged In Galleon Case

Jul 3 2014 | 12:00pm ET

A former Goldman Sachs banker won’t face a Securities and Exchange Commission lawsuit alleging that he tipped hedge fund Galleon Group about a pending acquisition in 2009.

The regulator a year-and-a-half ago was prepared to file against Matthew Korenberg, his lawyer, John Hueston, told Bloomberg News. But it took the “extraordinary” step of dropping the case, with Korenberg now officially “de-authorized” as a target.

The SEC had alleged that Korenberg tipped Galleon’s Paul Yook about Abbott Laboratories’ 2009 acquisition of Advanced Medical Optics. Galleon collapsed later that year after founder Raj Rajaratnam was arrested on insider-trading charges; he was later convicted and sentenced to 11 years in prison.

Korenberg’s name emerged two years ago during the case against former McKinsey & Co. chief Rajat Gupta, another alleged Galleon source. Gupta’s lawyers pointed to Korenberg as another potential source of insider information about Goldman, on whose board Gupta served, as part of his defense.

Gupta was convicted two years ago and began a two-year sentence last month.

“Too often cases are filed and reputations are ruined before mistakes of fact and judgment are realized,” Hueston told Bloomberg. “There has been real cost here.”

Korenberg worked in Goldman’s San Francisco office until leaving the bank at the end of 2012.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of