More arrests in Galleon insider-trading case: sources

5/11/2009 - 14:36

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BOSTON (Reuters) - Federal authorities have arrested eight more people in connection with the Galleon insider-trading scandal, sources familiar with the matter said on Thursday.

The sources said authorities intend to announce the filing of charges against 14 new defendants, including the eight arrested.

The new arrests come nearly three weeks after Raj Rajaratnam, the billionaire founder of hedge fund firm Galleon Group, and five others were charged in the case.

Galleon, a prominent New York-based firm that once managed $7 billion and specialized in technology and healthcare companies, has since shut down.

Industry sources said they had expected more arrests as authorities probe the scandal, which has unnerved the $1.4 trillion hedge fund industry at a time when performance was improving and investors were committing new money.

(Reporting by Matthew Goldstein, Svea Herbst-Bayliss; editing by John Wallace)

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