Raj Rajaratnam’s insider-trading charges have apparently taken a toll on his once-mighty firm. The billionaire founder of Galleon Group charged last week by federal prosecutors with insider trading, notified investors in a letter Wednesday morning that he is liquidating his hedge funds.
Galleon, which managed about $3.7 billion and reportedly has been hit with heavy redemptions this week after Rajaratnam’s arrest Friday, is exploring various alternatives for the business, according to the letter. The move caps a dramatic ending for Rajaratnam and Galleon, once a premier hedge fund. New York-based Galleon has been approached by outside parties interested in buying the company and an undetermined amount of its assets, according to Bloomberg News.
Here is the letter that Rajaratnam sent to investors and employees today:
Dear Galleon Employees, Clients and Friends,
“I have decided that it is now in the best interest of our investors and employees to conduct an orderly wind down of Galleon’s funds while we explore various alternatives for our business. At this important time, I want to reassure investors of the liquidity of our funds and assure Galleon employees that we are seeking the best way to keep together what I believe is the best long / short equity team in the business.
As many of you know, we have built our business on the fundamental belief in rigorous investment analysis combined with active trading around core positions. We have encouraged and invited our investors to attend our daily research morning meetings. Many of you have done so and got a first hand look at our process. This research process is the core of our investment and trading strategy.
The privilege of managing investors’ capital is a responsibility that I have always taken very seriously. I want to reiterate that I am innocent of all charges and will defend myself against these accusations with the same intensity and focus I have brought to managing our investors’ capital.
For those who have been my partners and supporters over the last 17 years, I sincerely thank you. I also want to thank you for the innumerable expressions of support I have received from you over the past few days.”