Business News - Galleon case grows with 14 arrests

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Galleon case grows with 14 arrests

NEW YORK (UPI) -- Authorities charged 14 investors and attorneys with insider trading Thursday, expanding the case involving New York hedge fund Galleon Group.

Billionaire founder of the fund Raj Rajaratnam was arrested last month. Thursday's arrests include attorney Arthur Cutillo of the prestigious law firm Ropes & Gray, The New York Times reported.

Cutillo and seven others are accused of offering confidential information to investors. The charges say the accused used a variety of techniques to avoid detection, including the use of prepaid cellphones and trading information in cars.

Although concerned about wiretaps, one defendant, Zvi Goffer, warned another, Jason Goldfarb, to be careful about the trades he made.

Goffer is quoted as telling Goldfarb, "someone's going to jail, going directly to jail, so don't let it be you, OK?"

A complaint reveals that the Federal Bureau of Investigation followed various defendants for more than two years, the Times said.

Former Galleon employees Zvi Goffer and Craig Drimal were cited as leaders of the conspiracy. Goffer is among several defendants who now works at Incremental Capital.

Ropes & Gray said in a statement, "we are deeply disappointed to learn about this situation, which suggests an extreme breach of this person's duty of trust."

Copyright 2009 by United Press International

This news arrived on: 11/05/2009

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