Another Galleon Defendant Is Sentenced to Prison

Another defendant in the on going Galleon insider trading investigation was sentenced to prison. This time it was Jason Goldfarb who previously pleaded guilty. The court sentenced Mr. Goldfarb to three years in prison. U.S. v. Goffer, No. 1:10-cr-00056 (S.D.N.Y.).

Mr. Goldfarb was involved in the insider trading ring with former Ropes and Gray associates Arthur Cutillo and Brien Santarlas. In 2007 and 2008 Messrs. Cutillo and Santarlas furnished inside information on deals being handled by the firm to Mr. Goldfarb who is also an attorney. The inforation concerned the then pending deals involving 3Com Corporation and Axcan Pharma, Inc. Mr. Goldfarb in turn furnished that information to Zvi Goffer, known as Octopussy because of his multiple sources of information. The information was exchanged for cash. Mr. Goffer traded on the information and passed it on to others who also traded.

Messrs. Cutillo and Santarlas previously pleaded guilty to conspiracy and securities fraud charges in connection with the scheme. Mr. Cutillo was sentenced to thirty months in prison. Mr. Santarlas is scheduled to be sentenced on September 21, 2011. Mr. Goffer was convicted of conspiracy and securities fraud charges following a jury trial. He is scheduled to be sentenced on October 28, 2011.

Raj Rajaratnam's Motion for Acquittal under Fed. R. Crim. Proc. 29 was denied in a ruling handed down on August 16, 2011. The found of the Galleon hedge funds was previously convicted when a jury returned a verdict of guilty on five counts of conspiracy to commit securities fraud and nine counts of securities fraud.

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