An investigation is being carried out on the accused in the Goldman Sachs insider trading case, Matthew Korenberg, an investment banker based in San Francisco. He was suspected of discussing two health care company deals with a hedge fund manager. Los Angeles based federal prosecutors are investigating whether the banker informed Raj Rajarathnam, the founder of Galleon Group about the acquisitions of MedImmune and Advanced Medical Optics in 2007 and 2009 respectively, prior to the companies going public with the deals.
Goldman Sachs was Informed About Allegations Over Two Years Ago
Goldman Sachs' spokesperson stated that the company was informed about the allegations over two years ago. Since then, Goldman Sachs has been investigating the cases and co-operating where required, with federal authorities. The spokesperson clarified that Korenberg is currently employed with the company. He is being represented by John Hueston, partner at the law firm Irell & Manell.
According to Hueston, despite the fact that the government had been carrying out investigations for more than two years, it has not been able to come up with any results. He stated that this is because Korenberg has not done what he has been accused of - providing inside information.
Rajat Gupta too Charged for Sharing Inside Information
Till recently, no one knew about the investigation that had been underway for more than two years. Details about it were released during a hearing against Rajat Gupta, former director of Goldman Sachs. He has been charged for sharing inside information about two companies - Goldman Sachs and Proctor & Gamble - with Rajaratnam.
Gupta and Rajaratnam's cases are connected as the former has been accused of passing information to the latter. Gary Naftalis, Gupta's lawyer argued that his client has been wrongfully accused. Hueston stated that there is no doubt that Korenberg and Gupta do not have any connection and that the former has not worked on any deals in the latter's case. He clarified that Korenberg's name should not have come up in the case, and that the fact that it has, is a shame.