Former Galleon Group LLC trader Zvi Goffer, accused of leading one of three insider-trading rings that are the subject of a nationwide U.S. probe, was indicted along with four others on additional charges.
Prosecutors filed a superseding indictment yesterday against Goffer, his brother, Emanuel Goffer, Craig Drimal, Michael Kimelman and Jason Goldfarb. All the defendants were traders, except Goldfarb, who is a lawyer.
The indictment adds new charges of securities fraud against Zvi Goffer, who now faces two counts of conspiracy and 12 counts of securities fraud. It also removes as defendants David Plate, a former trader at Schottenfeld Group LLC, and Arthur Cutillo, who worked as a lawyer with the firm Ropes & Gray LLP.
Plate and Cutillo have pleaded guilty. The others have pleaded not guilty and deny wrongdoing.
Prosecutors said the Goffer ring traded on stock tips originating from lawyers at Ropes & Gray in New York and from Gautham Shankar, an ex-trader at New York-based Schottenfeld.
The U.S. has placed Zvi Goffer at the center of the scheme and claimed his accomplices called him “Octopussy,” a reference to the 1983 James Bond movie, because of his many sources of information. Goffer’s lawyers dispute the characterization.
The case is scheduled to begin trial in U.S. District Court in Manhattan May 9.
Galleon co-founder Raj Rajaratnam is nearing the end of his insider trading trial in Manhattan federal court. Rajaratnam has pleaded not guilty, claiming his stock purchases were the result of legitimate research.
The case is U.S. v. Goffer, 10-cr-00056, U.S. District Court, Southern District of New York (Manhattan).
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