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Thursday, November 05, 2009

Stocks In Galleon Probe Shrug Off New Drama

By Matt Egan

FOXBusiness

Even as the plot thickens in the Galleon Group insider-trading investigation, the stocks at the center of the alleged crimes were generally unfazed on Thursday.

Shares of networking companies 3Com (COMS) and Atheros Communication (ATHR) climbed more than 2% a piece amid a broad tech rally. Instead of focusing on the allegations that an additional 14 individuals conducted insider-trading on these and other stocks in 2007, traders bid up 3Com and Atheros after networking titan Cisco Systems (CSCO) reported better-than-expected results and offered a bullish outlook late Wednesday.

At the same time, Alliance Data Systems (ADS), which was also mentioned as a stock at the center of a new criminal complaint filed Thursday by the U.S. Attorney’s office, jumped 3.5% Thursday afternoon.

Earlier in the day ADS said in a Securities and Exchange Commission filing it signed a new multi-year agreement with Visa (V) to develop, host and operate the card giant’s next generation loyalty program for its issuers.

One of the only publicly-traded companies mentioned in the new criminal complaint that was having a bad day was Blackstone Group (BX), which slumped 2% after its Travelport private equity fund agreed to inject $50 million into online travel site Orbitz Worldwide (OWW). Orbitz announced the investment after reporting weaker-than-expected third-quarter results.

According to the criminal complaint, Deep Shah, then an analyst at Moody’s (MCO), told Galleon on July 2, 2007, that Hilton Hotels was going to be taken private by Blackstone sometime before July 4, 2007.

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