Tuesday, 26 July 2016
Last updated 3 hours ago
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.