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Galleon Group

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Galleon Group
IndustryInvestment management
Founded1997
FounderRaj Rajaratnam
Ari Arjavalingam
Gary Rosenbach
Krishen Sud
HeadquartersNew York, NY
ProductsHedge funds
Websitewww.galleongrp.com

Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009.[1] The firm was at the center of a 2009 insider trading scandal that resulted in investors pulling capital from the firm rapidly.[2] Galleon was headquartered in New York City.

The firm was founded by Raj Rajaratnam, a former equity research analyst at Needham & Company, in 1997.[3][4] Rajaratnam was arrested in October 2009 along with five others and charged with multiple counts of fraud and insider trading. He pleaded not guilty and remained free on a $100 million bond. He was indicted by a grand jury in December 2009 [5] and found guilty in U.S. District Court on 14 charges in May 2011.[6][7] He was sentenced U.S. District Judge Richard Sullivan, to 11 years in prison on the 13th October, 2011.[8]

Other former and current traders at Galleon were subsequently arrested and charged with contributing to the alleged conspiracy. Several former employees of the firm are cooperating in the investigation.[9] Over twenty-one people have been arrested to date in the sprawling probe of Galleon (not all of them Galleon employees) and over twenty have pleaded guilty.[10] Zvi Goffer, an ex-Galleon Group LLC trader, was found guilty of all 14 counts of conspiracy and securities fraud against him and sentenced by Judge Sullivan "to 10 years in prison for his role in a scheme to trade on inside information provided by lawyers". Goffer had asked for a lenient sentence and prosecutors had recommended more than 10 years. Two lawyers had misappropriated information and Goffer, aged 34 when sentenced, had made more than $10 million trading in shares of 3Com Corp., Axcan Pharma Inc., Kronos Incorporated and Hilton Hotels Corp.. He worked for Schottenfeld Group LLC, and Incremental Capital LLC as well as Galleon during his Wall Street career.[8]

The firm was named for the galleon, a large sailing ship used from the 16th to 18th centuries in Europe.

References

  1. ^ Galleon to Wind Down Hedge Funds. Wall Street Journal, October 21, 2009
  2. ^ Galleon Clients Abandon Ship. Wall Street Journal, October 21, 2009
  3. ^ "General Information". Teksia. Retrieved 2009-02-19.
  4. ^ "Who is the Galleon Group?". SiliconIran. Retrieved 2009-02-19.
  5. ^ http://www.nytimes.com/2009/12/16/business/16insider.html/ New York Times, December 15, 2009
  6. ^ http://www.cnbc.com/id/42989354/ CNBC.com, May 11, 2011
  7. ^ Lattman, Peter; Ahmed, Azam (May 11, 2011). "Galleon's Rajaratnam Found Guilty". The New York Times.
  8. ^ a b Van Voris, Bob, and Patricia Hurtado, "Ex-Galleon Trader Zvi Goffer Sentenced to 10 Years in Prison", Bloomberg via San Francisco Chronicle, September 21, 2011. Retrieved 2011-09-21.
  9. ^ http://dealbreaker.com/2010/06/former-galleon-trader-franz-tudor-key-to-galleon-case/ Dealbreaker.com, June 2, 2010
  10. ^ http://www.businessweek.com/news/2010-03-29/robert-moffat-pleads-guilty-in-galleon-group-case-update1-.html

Interactive and visual Relationship Map showing Galleon Group's ownerships [1] and Raj Rajaratnam's relationships [2]

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