New Galleon-Related Insider Trading Convictions

By FOXBusiness

A former Galleon Group trader and two of his associates were found guilty Monday of charges related to insider trading, the latest round of convictions with ties to the once-high flying hedge fund.

Zvi Goffer, his brother Emanuel and Michael Kimelman were convicted by a jury of conspiracy and securities fraud, a spokesman for the U.S. Attorneys Office in Manhattan confirmed.

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Goffer was found guilty on 14 counts of conspiracy and securities fraud. His brother and Kimelman were each convicted on one count of conspiracy and two counts of securities fraud.

Goffers former boss, Galleon Group co-founder Raj Rajaratnam, was convicted last month on similar charges in a case prosecutors said was the largest insider trading scheme in history.

Goffer left Galleon in 2008 and started his own firm called Incremental Capital with his brother and Kimelman.

Goffer, like Rajaratnam, was accused of gleaning insider information illegally through a network of traders, company executives and researchers at so-called expert networking firms.

Goffer and his colleagues would then use the illegally obtained information to trade ahead of significant announcements by publicly traded companies.

The accused frequently tapped into contacts at technology companies, but not always. Goffer, for instance, was convicted for trading on illegally obtained information on chemical company Kronos Inc. (NYSE:KRO), among a handful of other publicly traded firms.

The cases against Goffer, Rajaratnam and other defendants with ties to Galleon marked the first time prosecutors employed the extensive use of wire taps to gather evidence in insider trading schemes.

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