Galleon Group to liquidate hedge funds after founder's arrest
It didn’t take long for the blockbuster insider-trading charges against billionaire hedge-fund founder Raj Rajaratnam to take a toll on his once-mighty firm.
Galleon Group notified investors in a letter Wednesday morning that it is liquidating its hedge funds in the aftermath of Rajaratnam’s arrest last week on charges of running a massive insider-trading ring. “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,” Rajaratnam wrote in the letter addressed to employees, clients and friends.
The move caps a dramatic downfall for Rajaratnam and Galleon, once a premier hedge fund that managed $3.7 billion. Galleon reportedly had been hit with heavy redemptions this week after Rajaratnam’s arrest Friday. Outside parties have expressed interest in purchasing the firm and some of its assets, according to Bloomberg News.
Federal authorities arrested Rajaratnam and five others on charges that they took part in a vast insider-trading conspiracy in which they swapped information on multiple companies. Rajaratnam proclaimed his innocence in Wednesday's letter. “I want to reiterate that I am innocent of all charges and will defend myself against these accusations with the same intensity and focus I have brought to managing our investors’ capital,” he wrote.
-- Walter Hamilton