BOSTON -- Galleon Group, the hedge-fund firm at the center of the biggest insider-trading case in decades, liquidated most of its $3.7 billion portfolio last week, a person familiar with the situation said on Tuesday.
New York-based Galleon, which specialized in technology and healthcare stocks and owned large positions in Google Inc and Apple Inc, sold off most of its stakes at advantageous prices, the source said.
"The wind-down is 90 percent complete," said the source, who was not authorized to speak about the matter publicly.
Federal prosecutors have accused Raj Rajaratnam, co-founder of Galleon, and five other individuals of illegally trading on nonpublic information in a scheme that netted them $20 million. Rajaratnam says he is innocent. He is free on $100 million bail.
Soon after Rajaratnam's arrest on October 16, many of his investors, ranging from endowments to wealthy individuals, began demanding their money back immediately.
Under normal conditions, investors would have to notify the firm by November 15 of their intention to exit and would have to wait 45 days to get their money.
Although Galleon now has the cash, investors will likely have to wait until early next year to get their money, the person familiar with the liquidation said.
Still, lawyers said some investors may try to get their money out more quickly, especially now that the portfolio has largely been liquidated.
The difference between Galleon and other funds that have closed down in recent years is that Galleon funds largely boasted strong returns this year, which will likely allow many investors to walk away with gains.
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