August 9, 2022

DealBook: Zvi Goffer Found Guilty in Insider Trading Case

Zvi Goffer

A federal jury in Manhattan on Monday found Zvi Goffer and two co-conspirators guilty of insider trading, the latest development in the government’s investigation into insider trading at hedge funds.

Mr. Goffer, his brother Emanuel Goffer and Michael A. Kimelman were convicted of participating in an insider trading scheme that produced more than $20 million in illegal profits.

The case was connected to the prosecution of Raj Rajaratnam, the hedge fund tycoon and co-founder of the Galleon Group, who was found guilty last month in the largest insider trading case in a generation. Zvi Goffer, who sat in on much of Mr. Rajaratnam’s trial, was employed by Galleon.

Like the case against Mr. Rajaratnam, this trial had phone wiretaps playing a central role. The jury heard recordings of Mr. Goffer swapping secret corporate information with fellow traders.

Much of the illegal trading featured in the Mr. Goffer trial was based on on illegal tips about mergers and acquisitions from two corporate lawyers at Ropes Gray in Manhattan. The two lawyers, Arthur Cutillo and Brien Santarlas, had previously pleaded guilty to providing Mr. Goffer and others with information about the secret deals. Mr. Santerlas testified during the trial.

Among the transactions the lawyers leaked to Mr. Goffer: TPG’s $1.3 billion acquisition of Axcan Pharam in November 2007 and Bain Capital’s agreement to pay $2.2 billion for 3Com in September of that year.

Zvi Goffer, 34, worked at a number of different trading shops before joining Galleon in 2008. After just nine months there he left to start his own hedge fund, Incremental Capital, with his brother and Mr. Kimelman.

A parallel civil complaint brought by the Securities and Exchange Commission said that Mr. Goffer’s nickname among his fellow traders was “Octopussy” — a reference to the James Bond movie — because his arms reached into so many sources of information.

During the trial, William Barzee, the lawyer for Mr. Goffer, described his client as a “gold miner” who panned for gold along the “river of gossip.”

Mr. Kimelman, who was tried as one of Mr. Goffer’s co-conspirators, practiced law at Sullivan Cromwell before becoming a Wall Street trader.

“We are enormously disappointed with the verdict as we believed the evidence clearly showed that Mr. Kimelman had not engaged in any insider trading,” said Michael Sommer, the lawyer for Mr. Kimelman. “We will of course pursue all avenues of appeal.”

Mr. Barzee and Michael Ross, the lawyer for Emanuel Goffer, did not immediately respond to a request for comment.

Article source:

Speak Your Mind