Galleon Group To Shut Down Hedge Funds

MARK JEWELL

BOSTON (AP) — A hedge fund company whose manager is criminally charged in an insider trading case has told clients it's shutting down its funds, after investors pulled out millions in the wake of the allegations.

A letter obtained Wednesday by The Associated Press said Galleon Group LLP plans "an orderly wind down" of its funds while it explores "various alternatives for its business." Portfolio manager Raj Rajaratnam, who is currently free on $100 million bail, wrote to clients and employees that he wants to reassure them the funds are liquid, meaning assets such as stock holdings can be converted to cash for distribution to fund shareholders.

New York-based Galleon Group manages about $3.7 billion. Prosecutors who filed the case against Rajaratnam and five others on Friday said Galleon had previously managed up to $7 billion. Publicity surrounding the case led some investors to withdraw money.

Galleon Group's letter did not specify what business options the company was exploring. A person familiar with the situation said Galleon had been approached by parties interested in a possible purchase of the company. The person requested anonymity because of the sensitive nature of the situation.