views

Galleon probe extends reach

PROSECUTORS investigating UShedge fund Galleon have issued a subpoena to a former employee of SAC Capital Advisors, broadening the insider-trading enquiry.<br /><br />The subpoena was sent to Richard Grodin, who worked for Stephen Cohen&rsquo;s SAC Capital, but neither he nor Cohen is accused of any wrong-doing.<br /><br />It is the first indication that the net is widening after Raj Rajaratnam and five others were implicated. <br /><br />Grodin is part of a circle of traders connected by personal and professional ties, and it is alleged he is indirectly linked to inside information on Google being passed on.<br /><br />It is claimed that Galleon maintained a network of informants who secretly passed on corporate news ahead of major announcements. <br /><br />Sri Lankan billionaire Rajaratnam is thought to have received information about computing firm Intel from an inside source since 1998, as well as many other firms.<br /><br />Rajaratnam is open to selling Galleon to a rival and to have already heard offers, and a management buy-out of the Asian arm of the company, to be led by Sree Vallipuram, has also been mooted.<br /><br />Alongside Rajaratnam, Rajiv Goel, director of strategic investments at Intel Capital and Anil Kumar, director at management consultants McKinsey, are also accused.<br /><br />Fellow accused Sunil Bhalla, senior vice president at Polycom, has been put on administrative leave, and at New Castle Partners founder Mark Kurland has been given a leave of absence, while former consultant Danielle Chiesi has had her relationship to the firm severed. All of the accused maintain their innocence.<br />