The secret witness at the center of the investigation into the billionaire Raj Rajaratnam and his hedge fund, the Galleon Group, dubbed “Tipper X”, has been revealed.
His name, according to the NYT, is Thomas Hardin — a 32-year old former trader at Lanexa Global Management — who, the authorities claim, traded on inside information and may now help prosecutors expand their probe to several other hedge funds that had not been previously implicated.
WSJ: “Mr. Hardin, or “Tipper X” as he is referred to in the SEC complaint, was tipped off on July 2, 2007, to a Blackstone Group Inc. takeover of Hilton Hotels Corp., according to the SEC complaint.
After receiving the tip, the SEC says, Tipper X then tipped Gautham Shankar, a trader involved in the alleged “Octopussy” ring, about the takeover. Tipper X “traded profitably” on the tip, according to the SEC complaint, while Mr. Shankar bought 25,000 shares of Hilton and made a profit of $156,000, the complaint says. Mr. Shankar pleaded guilty to insider-trading charges and is cooperating with the government’s investigation as well. A lawyer for Mr. Shankar didn’t return calls for comment.
Mr. Hardin’s name surfaced in a court filing made by the SEC in connection with the civil case, which is moving toward a trial date this summer under federal judge Jed Rakoff. The filing includes a list of individuals that the SEC says might have information about the case.”
A large number of cooperating witnesses could spawn other investigations, the Journal said, citing people close to the situation.
Twenty-one people have been charged in the Galleon insider trading case that involves employees of some of America’s best-known companies.