Evidence Piles Up Against Goffer

As he sits at the defense table and hears the evidence mount up, Zvi Goffer must not be in the best frame of mind right now. His sleep won't be helped by testimony of trader Michael Cardillo, who in January pleaded guilty to insider trading charges in the Galleon Group case.

Cardillo, known as "Dillo", received tips from another Galleon trader, Craig "Ruby" Drimal. Drimal, who also plead guilty, in turn got the confidential information from Goffer. Cardillo testified that he was aware of phone conversations between Drimal and Goffer that took place over the "Bat Phone". a prepaid cellular phone that was untraceable. All ring members got Bat Phones, courtesy of Zvi Goffer.

Upon cross-examination, Dillo admitted he hadn't heard the contents of the conversations, and that he didn't know Goffers co-defendants Emanual Goffer and Michael Kimelman. Nontheless, Dillo owned up to talking directly with convicted ringleader Raj Rajaratnam's brother, Rengan. Rengan is an unindicted co-conspirator in the case. Dillo pointed out that Rengan was used to cover up illegal actions that took places.

Dillo actually sent out emails to other Galleon employees, such as Rengan, boosting companies he was about to trade due to confidential tips. "I sent it as a cover-up to buying the stock based on inside information," he said.

Eric Bank, Freelance Writer

© 2011 Hedge Fund Writer LLC

Goffer's Words Now Haunt Him

Meet David Slaine. He used to be a portfolio manager at the Chelsey Capital hedge fund. Then, he found himself caught up in an insider trading scandal, with some very persistent federal agents asking him disturbing questions. So if you are David Slaine, what would you do?

Slaine donned a wire and recorded a conversation on Dec. 17, 2007 with Zvi Goffer, the main target of the second Galleon Group trial. The result was an incriminating utterance from Goffer, to wit:

"I'll give you, I'll give you my information. I'm not going to sell my information. It's too valuable. … I don't know what he does, how he does it, but he gets it from somewhere.

Goffer is referring to a "unionized construction worker" who gave him four valuable tips.

Zvi Goffer was the founder of Incremental Capital and with his brother Emanual and partner Michael Kimelman stand accused of conspiracy and securities fraud. Goffer led one insider trading ring, Galleon founder Raj Rajaratnam led another.

Rajaratnam was found guilty earlier in May of insider trading. He is awaiting a sentence that could span decades. Zvi Goffer can only sit and wait as the majesty of the justice system unfolds.

Eric Bank, Freelance Writer

© 2011 Hedge Fund Writer LLC

Lawsuit Charges Investment Chief Spied on Employees

Elena Ambrosiadou runs the $2 billion IKOS Asset Management. Apparently, she is also a spymaster who delved into the lives of employees, as alleged by former portfolio manager Tobin Gover. Gover was originally hired by Ambrosiadou's now-estranged husband, Martin Coward. The lawsuit lays the blame for the spying on Ambrosiadou's desire to undermine her husband by firing Gover and his team.

Gover was fired in 2008. He says he was spied upon by Laura Merts, an operative trained in Israel in unarmed combat and counter-terrorism, according to the suit. Merts moved into an apartment in Cyprus adjacent to Gover's, and continued spying on Gover even after his firing. 

Gover claims he was not the only victim of IKOS spies. After befriending Gover, Merts became the Gover family babysitter. Merts used the pseudonym Laura Van Egmond as she plied her trade on the unsuspecting Gover family.

Even though IKOS denied the allegations, Ambrosiadou did not offer a defense at trial. A default judgment against her thus ensued and Ambrosiadou has agreed to pay substantial damages, according to The Sunday Telegraph.

Needless to say, this affair has put a strain on the Ambrosiadou-Coward marriage. Ambrosiadou started divorce proceedings in 2009 when Coward left the firm, even though he still owns half of IKOS. A court in Cyprus has gagged Coward from discussing the matter. Too bad!

Eric Bank, Freelance Writer

© 2011 Hedge Fund Writer LLC