Thursday November 5, 06:15 PM
US prosecutors charge 14 in insider trading probe
NEW YORK (AFP) - Prosecutors in New York charged 14 people Thursday in a widening probe apparently linked to what was allegedly the largest hedge-fund insider trading scheme ever on Wall Street.
The office of Manhattan US Attorney Preet Bharara said 14 people, "including attorneys and Wall Street professionals" were charged "for their alleged involvement in insider trading that netted 20 million dollars."
The central figure among those charged was Zvi Goffer, who worked for the hedge fund Galleon Management LP and set up the hedge fund Incremental Capital.
He is alleged to have played a key role in the ring in which he "paid sources for inside information" about companies, including news of mergers and acquisitions, then made deals on the stock market.
Others charged Thursday with insider trading include current and former employees at Galleon, Ropes and Gray law firm, and Incremental Capital.
The criminal complaint said that evidence had been gathered using telephone wiretaps and informants. It also said that Goffer issued participants in the alleged ring with prepaid cellphones which were meant to make detection of the scheme harder.
Galleon Management LP was shut down last month after Sri Lankan founder Raj Rajaratnam was indicted in the alleged scheme. Rajaratnam faces up to 20 years in prison for allegedly using insider information from heavyweight companies including Google (NASDAQ: GOOG - news) , IBM (NYSE: IBM - news) , Hilton and Moody's.
Rajaratnam's fund was estimated to be worth 3.7 billion dollars when it was shut down. The entrepreneur featured on Forbes magazine's world list of billionaires this year in the 559th spot.
Prosecutors said at the time of his arrest that he was part of "the largest hedge fund insider trading case in history" and that Rajaratnam and others "earned millions of dollars of illegal profits for themselves and the hedge funds with which they were affiliated."
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