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.
For more cutting edge commentary on
developing securities issues, visit SEC Actions, a
blog by Thomas Gorman.
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