Galleon Group winding down hedge funds after founder arrested for insider trading

October 21, 2009 by · Leave a Comment
Filed under: Stock Market News 

After the bombshell dropped on the public and Galleon investors that the funds founder Raj Rajaratnam was allegedly involved in a insider trading operation that was helping generate attractive profits to many investors including some college endowments.  Redemption requests  were over 1/3rd of the hedge funds total capital at the time of this writing.

Mr. Rajaratnam has claimed his innocence and he plans to fight these charges in court and closing down the fund was needed so he could focus on this defense in a statement made in the press release.

Reuters, New York – Hedge fund firm Galleon Group said it is winding down its funds, less than a week after its founder was arrested and charged with running one of the biggest insider-trading schemes ever involving a hedge fund.

“I have decided that it is now in the best interest of our investors and employees to conduct an orderly wind down of Galleon’s funds while we explore various alternatives for our business,” Raj Rajaratnam, the fund firm’s 52-year-old billionaire founder, said in a letter to investors and employees on Wednesday.

Galleon, which managed $3.7 billion at the end of last week and boasted strong returns through September, has attracted some potential buyers, a source familiar with the matter said. The source declined to give details.

Rajaratnam and five other individuals are accused of illegally trading on nonpublic information. Prosecutors say the scheme netted more than $20 million.

Source:  Reuters

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