Bloomberg News

Goffer Trial Jury Begins Considering Insider-Trading Charges

June 02, 2011

(Updates with government allegations in fifth paragraph.)

June 2 (Bloomberg) -- Jurors began considering the insider- trading case against Zvi Goffer, the former deputy of Galleon Group LLC co-founder Raj Rajaratnam, who is on trial with two other men in federal court in Manhattan.

U.S. District Judge Richard Sullivan told the 12 jurors hearing the case to start their deliberations today after closing arguments ended this morning. They ended the day without reaching a verdict and are scheduled to return June 6.

Zvi Goffer, 34, Emanuel Goffer, 32, and Michael Kimelman, 40, are charged with securities fraud and conspiracy. The defendants were involved in one of three overlapping rings tied to Galleon, according to prosecutors.

Earlier today, Michael Sommer, a lawyer for Kimelman, told jurors that his client wasn’t part of the alleged conspiracy and urged them to find Kimelman not guilty. Assistant U.S. Attorney Andrew Fish, in a rebuttal, argued that recorded conversations between Kimelman and Zvi Goffer prove Kimelman knew they were trading on confidential inside information.

Prosecutors allege Zvi Goffer paid two now-former Ropes & Gray LLP lawyers for tips on upcoming acquisitions. Prosecutors say the lawyers passed on tips about 3Com Corp, Axcan Pharma Inc., Kronos Inc and Hilton Hotels Corp.

The U.S. Securities and Exchange Commission claimed in a related civil suit that the Goffer scheme resulted in at least $20 million in illicit profit. Fourteen people were charged in the alleged insider trading ring. Ten have pleaded guilty and the remaining defendant is a fugitive.

The case is U.S. v. Goffer, 10-cr-00056, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Michael Hytha, Fred Strasser

To contact the reporters on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net; Bob Van Voris in Manhattan federal court at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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