Scarred by insider-trading case, Galleon decides to liquidate

Galleon Group, the hedge fund at the center of the insider-trading case against billionaire Raj Rajaratnam, is liquidating its funds.

In a letter to investors today, Rajaratnam said it was exploring alternatives for its business. That could include selling the firm and its assets to various parties that have expressed interest in pieces of Galleon, which at one point managed $3.7 billion.

“I have decided that it is now in the best interest of our investors and employees to conduct an orderly wind down of Galleon’s funds while we explore various alternatives for our business,” Rajaratnam said in the investor letter.

Rajaratnam was one of six people arrested Friday for an alleged $20 million insider trading scheme that is among the largest ever to involve a hedge fund. Rajaratnam is free on $100 million bail.

The wind down comes as Galleon has allowed investors to pull out their investments. The deadline for redemptions, as the withdrawals are called in hedge-fund parlance, had been Nov. 15.