Galleon Group
Encyclopedia
Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was at the center of a 2009 insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...

 scandal that resulted in investors pulling capital from the firm rapidly. Galleon was headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

.

The firm was founded by Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...

, a former equity research analyst at Needham & Company
Needham & Company
Needham & Company is an independent investment bank and asset management firm specializing in advisory services and financings for growth companies...

, in 1997. 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 and found guilty in U.S. District Court
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...

 on 14 charges in May 2011. He was sentenced U.S. District Judge
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...

 Richard Sullivan
Richard Sullivan
Richard Joseph Sullivan is a judge of the United States District Court for the Southern District of New York. Nominated by President George W. Bush on February 15, 2007 to fill the seat of the retired Judge Michael B. Mukasey, Sullivan was confirmed by the U.S...

, to 11 years in prison on the 13th October, 2011.

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. 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. 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
Axcan Pharma
Axcan Pharma Inc. is a privately held, Birmingham, Alabama-based, specialty pharmaceutical company that develops, manufactures, markets and distributes a broad line of gastrointestinal products primarily in North America and Europe. Formerly traded publicly on NASDAQ, Axcan was acquired by TPG...

 Inc., Kronos Incorporated
Kronos Incorporated
Kronos Incorporated, is a U.S.-based multi-national human capital management software and services company headquartered in Chelmsford, Massachusetts, USA and employing 3,000 people.- History :...

 and Hilton Hotels Corp.. He worked for Schottenfeld Group LLC, and Incremental Capital LLC as well as Galleon during his Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...

 career.

The firm was named for the galleon
Galleon
A galleon was a large, multi-decked sailing ship used primarily by European states from the 16th to 18th centuries. Whether used for war or commerce, they were generally armed with the demi-culverin type of cannon.-Etymology:...

, a large sailing ship used from the 16th to 18th centuries in Europe.
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