The SEC today expanded its Galleon insider trading case, charging individuals and entities - including a NY-based hedge fund advisor, its HF manager and an analyst, along with a senior corporate exec. in the technology sector, and an IR (investor relations) firm employee.  Robert Khuzami, Director of the SEC's Division of Enforcement made the announcement.

    SEC's Allegations.   Robert Feinblatt, co-founder and principal of Trivium Capital Mgmt LLC, and Trivium analyst Jeffrey Yokuty engaged in insider trading in the securities of Polycom, Hilton, Google and Kronos. The tippers were:   Sunil Bhalla, a Polycom senior exec., and Shammara Hussain, an employee with IR firm Market Street Partners that did work for Google.  Inside information that they provide enabled Feinblatt and Yokuty, on behalf of Trivium's hedge funds, to earn illicit profits north of $15 million.  

The SEC's complaint further alleges that Feinblatt and Yokuty traded on behalf of Trivium in connection with 2 corporate takeovers and 2 quarterly earnings announcements based on material nonpublic information that Feinblatt and Yokuty allegedly received from Roomy Khan, an individual investor who herself received such information from various sources.

The SEC alleges that Bhalla tipped Khan to inside information about Polycom's 2005 Q4 earnings, and Khan traded on that information and tipped others.  The tippees included Feinblatt and Yokuty, and they traded on that information.  Bhalla also tipped Khan with inside information about Polycom's 2006 Q1 earnings.  Khan traded, and  tipped Rajaratnam, who allegedly traded on behalf of Galleon based on that information. 

    SEC Staff Credited in the Investigation.   Sanjay Wadhwa, Jason Friedman, John Henderson of the SEC's Market Abuse Unit in New York;  Diego Brucculeri, James D'Avino of the NY Regional Office  conducted the investigation, which continues. Litigation will be led by Valerie Szczepanik and Kevin McGrath.

    SEC Tally.   So far, the SEC has charged 27 defendants in its SEC v. Galleon enforcement action that has alleged widespread and repeated insider trading at numerous hedge funds, including Galleon.  Galleon had been a multi-billion dollar NY HF complex founded and controlled by Raj Rajaratnam.  Galleon and other professional traders "in the ring" traded in the securities of 14 companies, generating $69 million in illicit profits.

The SEC seeks to disgorge them of their ill-gotten gains plus prejudgment interest, and order them to pay financial penalties, among other sanctions.  For complete details, refer to:   [SEC Release 11-6, 1/10]