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Galleon Insider Trading Case Grows With 14 New Defendants, Including Hedge Fund Employees

Nine more people have been arrest and 14 more have been charged in the insider-trading scandal surrounding the Galleon Group.

Among those arrested is a pair of former Galleon employees and four people who work at hedge fund Incremental Capital. The new collars come three weeks after Galleon founder Raj Rajaratnam was arrested and charged with spearheading the insider-trading ring.

Federal and state authorities scheduled a news conference for later in the day to unveil the conspiracy and fraud charges against the 14 new defendants, all of which were filed in New York federal court today.

Former Galleon employees Zvi Goffer and Craig Drimal were among the arrested. Goffer now works at Incremental, which also saw employees Emanuel Goffer, Michael Kimelman and David Plate charged in the alleged scheme. Former Moody’s Investors Service analyst Deep Shah, previously identified as a Galleon tipster, was also charged.

Prosecutors say that Zvi Goffer ran the $20 million insider-trading ring. He allegedly gave his sources prepaid cellular phones to phone in their tips, to avoid detection, and paid them for the information.

Last month, authorities charged Rajaratnam and five others with participating in the insider-trading circle. Among the Galleon chief’s co-defendants are a co-founder and former consultant at hedge fund New Castle Partners, Mark Kurland and Danielle Chiesi. All six of those previously charged have proclaimed their innocence and been released on bail; Rajaratnam on a record $100 million bond.

Galleon has since liquidated most of its hedge funds and announced plans to sell or wind-down the firm. New Castle has announced plans to reorganize its business without Kurland, who is on a leave of absence from the firm.


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