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FACTBOX - Deals targeted in Galleon insider trading case

Fri Oct 16, 2009 6:06pm EDT


NEW YORK, Oct 16 (Reuters) - Galleon Group founder Raj Rajaratnam and five others were charged with engaging in the largest ever hedge fund insider-trading scheme, generating profits of more than $20 million over several years, U.S. prosecutors, the FBI and the SEC said Friday. [ID:nN16545101]

The following lists some of the mergers, acquisitions, or earnings news in which the group was accused of insider trading on material, non-public information:

HILTON HOTELS CORP (HLNQ.PK: Quote, Profile, Research, Stock Buzz)

In July 2007, prosecutors say Galleon learned the hotel chain was going to be taken private and purchased hundreds of thousands of shares in Hilton. Galleon reaped improper profits of about $4 million on the trades, prosecutors say

POLYCOM INC (PLCM.O: Quote, Profile, Research, Stock Buzz)

Galleon purchased approximately 60,000 shares of Polycom and call options in Jan. 2006 based on inside information that its quarterly earnings results would beat expectations, prosecutors said.

CLEARWIRE CORP (CLWR.O: Quote, Profile, Research, Stock Buzz)

Around March 2008, Galleon bought about 125,800 shares of Clearwire based on inside information about an investment Intel Capital (INTC.O: Quote, Profile, Research, Stock Buzz) was planning to make in the company, prosecutors said.

AKAMAI TECHNOLOGIES INC (AKAM.O: Quote, Profile, Research, Stock Buzz)

On July 30, 2008, Akamai announced quarterly earnings and gave a weaker than expected forecast. Prosecutors allege New Castle was shorting about 26,900 shares of the stock based on material, non-public information, and earned a profit of $2.4 million on the trade. Galleon was also short hundreds of thousands of shares and holding put options, prosecutors said.

PEOPLESUPPORT INC

Rajaratnam received inside information in May 2008 about a potential acquisition of PeopleSupport, and in October purchased about 30,000 shares of the company in a brokerage account, prosecutors said.

GOOGLE INC (GOOG.O: Quote, Profile, Research, Stock Buzz)

Galleon purchased about 1,000 put options in Google in July 2007, and shorted approximately 25,000 shares of the stock based on inside information that the company's earnings per share would fall below analysts expectations, prosecutors said.

IBM (IBM.N: Quote, Profile, Research, Stock Buzz)

New Castle covered short positions, and bought IBM stock ahead of IBM's quarterly earnings on the belief it would "beat" analyst expectations in Jan. 2009, prosecutors say.

ADVANCED MICRO DEVICES INC (AMD.N: Quote, Profile, Research, Stock Buzz)

Around August and September 2008, New Castle bought shares of AMD, based on non-public information about a pending reorganization of its manufacturing business, prosecutors said. Galleon had bought about 4 million shares of AMD stock and call options based on inside information, prosecutors said.

SUN MICROSYSTEMS INC (JAVA.O: Quote, Profile, Research, Stock Buzz)

In Jan. 2009, New Castle bought shares of Sun, based on expectations about earnings and that IBM was looking at the business as a potential takeover, prosecutors said.

Source: Court Documents

(Reporting by Emily Chasan; Editing Bernard Orr)