Galleon tries to stem withdrawals


Raj Rajarathnam. NYT

After his startling arrest on Friday, on insider trading charges, Rajaratnam arrived at Galleon’s offices on Monday morning and told employees that he was innocent and that he would defend himself in court. However, despite assurances, Galleon faces an uncertain future. The firm, which Rajaratnam founded in 1997, has been besieged by investors looking to withdraw their money. One investor, Rochdale Securities, indicated that it planned to pull its money out of Galleon. Other big Galleon investors were expected to follow suit. A spokesman for Galleon declined to comment.

As part of their agreement with Galleon, investors in the firm’s biggest fund, which has about $1.3 billion in assets, are prevented from withdrawing their money right away, according to investors. Investors have until November 15 to submit withdrawal requests and will be paid out on January 1.

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