The Joplin Globe, Joplin, MO

Business

April 27, 2012

Insider trading inquiry focuses on medical devices deal, source says

LOS ANGELES — Prosecutors probing insider trading in the medical devices industry are investigating a senior Goldman Sachs banker and a former employee of the notorious hedge fund Galleon Group.

The investigation, according to a person briefed on the matter, is focused on the 2009 takeover of Advanced Medical Optics in Santa Ana, Calif.

The U.S. attorney’s office in Los Angeles has been scrutinizing the ties between Goldman managing partner Matthew Korenberg, who worked on the Advanced Medical Optics deal, and Paul Yook, a former portfolio manager at Galleon, the person said.

Korenberg’s attorney, John Hueston of Irell & Manella, said the San Francisco-based banker had done nothing wrong. Yook couldn’t be reached for comment.

Galleon’s head, Raj Rajaratnam, was convicted in a high-profile New York trial last year of 14 counts of conspiracy and securities fraud. The government said that he had made more than $50 million in illicit profits by trading on inside information. He was sentenced to 11 years in prison.

The disclosure that a senior Goldman banker was under investigation was made last week in a New York court by a lawyer for Rajat K. Gupta, the highest-ranking corporate figure implicated in the government’s long-running crackdown on insider trading. That banker was not named at the proceeding.

Gupta, a former Goldman director, is accused of leaking inside information to Rajaratnam. His attorney, Gary P. Naftalis, has said the inside information could have been leaked by someone at Goldman other than Gupta, who has pleaded not guilty.

Naftalis couldn’t be reached for comment.

Hueston, a former Los Angeles federal prosecutor who took a lead role in the Enron fraud cases, said a 2  1/2-year investigation of Korenberg by criminal prosecutors and the Securities and Exchange Commission “has gone nowhere and found nothing wrong.” A Goldman investigation also found no improprieties, Hueston added.

“There is simply no relation between Mr. Korenberg and Rajaratnam, Mr. Korenberg and Gupta,” Hueston said. “He has no connection to that case.”

Hueston declined to discuss Korenberg’s relationship with Yook.

The investigation of Abbott Laboratories’ takeover of Advanced Medical Optics is part of a broader inquiry of mergers and acquisitions in the medical devices industry, according to the person briefed on the matter, who was not authorized to discuss the case publicly and spoke on condition of anonymity.

The Advanced Medical Optics case already has produced one notable insider trading settlement. Former professional baseball player Doug DeCinces agreed in August to pay $2.5 million to settle SEC civil allegations that he acted on an illegal tip to score big profits trading the stock. DeCinces did not admit or deny the accusations.

 

1
Text Only
Business
  • Business US stocks close higher for third day in a row

    Investors drove stock prices to their highest level in a week Wednesday,

    April 16, 2014 1 Photo

  • China’s growth slows to 7.4 percent in 1Q

    China’s economic growth slowed further in the latest quarter but appeared strong enough to satisfy Chinese leaders who are trying to put the country on a more sustainable path without politically dangerous job losses.

    April 16, 2014

  • A look at 3 minority business mentoring programs

    A look at minority business mentoring programs, called accelerators, in three metropolitan areas.

    April 16, 2014

  • Why high oil prices are actually good for airlines

    Airline executives frequently complain about fuel costs. But the truth is higher prices actually have been good for business.

    April 16, 2014

  • Business US stocks open higher; Yahoo soars in early trade

    U.S. stocks moved higher in early trading on Wednesday, extending their gains into a third day. Investors welcomed solid earnings from Yahoo as well as some encouraging news about China’s economy and U.S. factory production.

    April 16, 2014 1 Photo

  • Detroit strikes second deal with its other retirees

    The city of Detroit reached tentative agreements to preserve pensions for retired police office and firefighters but cut monthly payments for other former employees, key deals that could accelerate the largest public bankruptcy in U.S. history, officials said Tuesday.

    April 16, 2014

  • Missouri court expands legal rights for injured workers

    The Missouri Supreme Court has overturned 30 years of precedent with a ruling that gives greater legal protections to injured workers who are fired from their jobs.

    April 15, 2014

  • Immigration activists urge Obama to act boldly

    Latinos and immigration activists are warning of political peril for President Barack Obama and Democrats in the fall election unless the president acts boldly and soon to curb deportations and allow more immigrants to remain legally in the U.S.

    April 15, 2014

  • Farmers off to slow start planting corn crop

    Spring planting across the nation’s Corn Belt is sputtering because the soil remains too soggy or cold for effective seeding.

    April 15, 2014

  • Schreiber Foods schedules Carthage plant expansion

    Plans to expand a Schreiber Foods plant to eventually add 160 new jobs have been endorsed by a Carthage committee working with the company. Andrew Tobish, director of combinations for Schreiber, which is based in Green Bay, Wis., confirmed the project, which he said would be complete by late spring or early summer in 2015.

    April 15, 2014

Poll

The Supreme Court may take up a challenge to an Ohio law that bars false statements about political candidates during a campaign. Do you think false accusations made in the heat of an election should be punished as a crime?

A. Yes.
B. No.
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
Disbanding Muslim Surveillance Draws Praise Hundreds Missing After South Korean Ferry Sinks Passengers Abuzz After Plane Hits Swarm of Bees Boston Bomb Scare Defendant Appears in Court Pistorius Trial: Adjourned Until May 5 Diaz Gets Physical for New Comedy Raw: Ferry Sinks Off South Korean Coast Town, Victims Remember Texas Blast Freeze Leaves Florida Panhandle With Dead Trees At Boston Marathon, a Chance to Finally Finish Are School Dress Codes Too Strict? Raw: Fatal Ferry Boat Accident Suspicious Bags Found Near Marathon Finish Line Boston Marks the 1st Anniversary of Bombing NYPD Ends Muslim Surveillance Program 8-year-old Boy Gets His Wish: Fly Like Iron Man Sex Offenders Arrested in Slayings of CA Women India's Transgenders Celebrate Historic Ruling Tributes Mark Boston Bombing Anniversary Raw: Kan. Shooting Suspect Faces Judge